Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 29, 2020 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | CARGURUS, INC. | |
Trading Symbol | CARG | |
Entity Central Index Key | 0001494259 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity File Number | 001-38233 | |
Entity Tax Identification Number | 04-3843478 | |
Entity Address, Address Line One | 2 Canal Park | |
Entity Address, Address Line Two | 4th Floor | |
Entity Address, City or Town | Cambridge | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02141 | |
City Area Code | 617 | |
Local Phone Number | 354-0068 | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Class A Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 94,160,683 | |
Class B Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 19,076,500 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 245,941 | $ 59,920 |
Investments | 111,692 | |
Accounts receivable, net of allowance for doubtful accounts of $610 and $240, respectively | 16,322 | 22,124 |
Prepaid expenses and prepaid income taxes | 7,325 | 10,452 |
Deferred contract costs | 9,950 | 9,544 |
Other current assets | 1,634 | 4,972 |
Restricted cash | 250 | 250 |
Total current assets | 281,422 | 218,954 |
Property and equipment, net | 27,276 | 27,950 |
Intangible assets | 10,262 | 3,920 |
Goodwill | 28,357 | 15,207 |
Operating lease right-of-use assets | 63,525 | 59,986 |
Restricted cash | 10,627 | 10,553 |
Deferred tax assets | 27,267 | 42,713 |
Deferred contract costs, net of current portion | 8,501 | 10,514 |
Other non-current assets | 3,314 | 3,826 |
Total assets | 460,551 | 393,623 |
Current liabilities | ||
Accounts payable | 16,839 | 36,731 |
Accrued expenses, accrued income taxes and other current liabilities | 17,878 | 18,262 |
Deferred revenue | 9,678 | 9,984 |
Operating lease liabilities | 11,472 | 8,781 |
Total current liabilities | 55,867 | 73,758 |
Operating lease liabilities | 62,016 | 60,818 |
Deferred tax liabilities | 304 | 284 |
Other non–current liabilities | 4,105 | 1,908 |
Total liabilities | 122,292 | 136,768 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding | ||
Additional paid-in capital | 233,246 | 205,234 |
Retained earnings | 104,249 | 51,859 |
Accumulated other comprehensive income (loss) | 651 | (350) |
Total stockholders’ equity | 338,259 | 256,855 |
Total liabilities and stockholders’ equity | 460,551 | 393,623 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 94 | 92 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 19 | $ 20 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 610 | $ 240 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 94,016,568 | 91,819,649 |
Common stock, shares outstanding | 94,016,568 | 91,819,649 |
Class B Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,076,500 | 20,314,644 |
Common stock, shares outstanding | 19,076,500 | 20,314,644 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Income Statements - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Income Statement [Abstract] | |||||
Revenue | $ 147,472 | $ 150,462 | $ 399,898 | $ 430,763 | |
Cost of revenue | [1] | 9,762 | 9,392 | 31,252 | 25,740 |
Gross profit | 137,710 | 141,070 | 368,646 | 405,023 | |
Operating expenses: | |||||
Sales and marketing | 57,618 | 100,133 | 189,796 | 293,238 | |
Product, technology, and development | 20,758 | 17,745 | 65,729 | 51,063 | |
General and administrative | 14,279 | 12,322 | 44,297 | 36,622 | |
Depreciation and amortization | 1,488 | 1,166 | 4,529 | 3,413 | |
Total operating expenses | 94,143 | 131,366 | 304,351 | 384,336 | |
Income from operations | 43,567 | 9,704 | 64,295 | 20,687 | |
Other income, net: | |||||
Interest income | 174 | 759 | 1,053 | 2,247 | |
Other income, net | 31 | 251 | 354 | 1,258 | |
Total other income, net | 205 | 1,010 | 1,407 | 3,505 | |
Income before income taxes | 43,772 | 10,714 | 65,702 | 24,192 | |
Provision for (benefit from) income taxes | 11,209 | 330 | 13,312 | (4,783) | |
Net income | $ 32,563 | $ 10,384 | $ 52,390 | $ 28,975 | |
Net income per share attributable to common stockholders: (Note 12) | |||||
Basic | $ 0.29 | $ 0.09 | $ 0.46 | $ 0.26 | |
Diluted | $ 0.29 | $ 0.09 | $ 0.46 | $ 0.26 | |
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders: | |||||
Basic | 113,027,995 | 111,662,949 | 112,707,003 | 111,257,271 | |
Diluted | 113,966,863 | 113,364,775 | 113,732,616 | 113,389,695 | |
[1] | I ncludes depreciation and amortization expense for the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019 of $944, $952, $4,250, and $2,246, respectively. |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Income Statements (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Depreciation and amortization expense | $ 944 | $ 952 | $ 4,250 | $ 2,246 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 32,563 | $ 10,384 | $ 52,390 | $ 28,975 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 1,013 | (929) | 1,001 | (997) |
Comprehensive income | $ 33,576 | $ 9,455 | $ 53,391 | $ 27,978 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2018 | $ 194,111 | $ 90 | $ 21 | $ 184,216 | $ 9,713 | $ 71 | ||
Beginning balance, Shares at Dec. 31, 2018 | 89,728,223 | 20,702,084 | ||||||
Net income | 12,584 | 12,584 | ||||||
Stock–based compensation expense | 7,995 | 7,995 | ||||||
Issuance of common stock upon exercise of stock options | 697 | 697 | ||||||
Issuance of common stock upon exercise of stock options, Shares | 447,210 | |||||||
Issuance of common stock upon vesting of restricted stock units, Shares | 297,374 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (3,954) | (3,954) | ||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (102,034) | |||||||
Foreign currency translation adjustment | (424) | (424) | ||||||
Ending balance at Mar. 31, 2019 | 211,009 | $ 90 | $ 21 | 188,954 | 22,297 | (353) | ||
Ending balance, Shares at Mar. 31, 2019 | 90,370,773 | 20,702,084 | ||||||
Beginning balance at Dec. 31, 2018 | 194,111 | $ 90 | $ 21 | 184,216 | 9,713 | 71 | ||
Beginning balance, Shares at Dec. 31, 2018 | 89,728,223 | 20,702,084 | ||||||
Net income | 28,975 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (345,114) | |||||||
Foreign currency translation adjustment | (997) | |||||||
Ending balance at Sep. 30, 2019 | 237,102 | $ 91 | $ 21 | 199,228 | 38,688 | (926) | ||
Ending balance, Shares at Sep. 30, 2019 | 91,312,647 | 20,502,084 | ||||||
Beginning balance at Mar. 31, 2019 | 211,009 | $ 90 | $ 21 | 188,954 | 22,297 | (353) | ||
Beginning balance, Shares at Mar. 31, 2019 | 90,370,773 | 20,702,084 | ||||||
Net income | 6,007 | 6,007 | ||||||
Stock–based compensation expense | 9,260 | 9,260 | ||||||
Issuance of common stock upon exercise of stock options | 391 | 391 | ||||||
Issuance of common stock upon exercise of stock options, Shares | 133,838 | |||||||
Issuance of common stock upon vesting of restricted stock units | $ 1 | (1) | ||||||
Issuance of common stock upon vesting of restricted stock units, Shares | 362,447 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (4,637) | (4,637) | ||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (122,137) | |||||||
Foreign currency translation adjustment | 356 | 356 | ||||||
Ending balance at Jun. 30, 2019 | 222,386 | $ 91 | $ 21 | 193,967 | 28,304 | 3 | ||
Ending balance, Shares at Jun. 30, 2019 | 90,744,921 | 20,702,084 | ||||||
Net income | 10,384 | 10,384 | ||||||
Stock–based compensation expense | 9,085 | 9,085 | ||||||
Issuance of common stock upon exercise of stock options | 368 | 368 | ||||||
Issuance of common stock upon exercise of stock options, Shares | 144,760 | |||||||
Issuance of common stock upon vesting of restricted stock units, Shares | 343,909 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (4,192) | (4,192) | ||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (120,943) | (120,943) | ||||||
Conversion of common stock, shares issued | 200,000 | |||||||
Conversion of common stock, shares converted | (200,000) | |||||||
Foreign currency translation adjustment | (929) | (929) | ||||||
Ending balance at Sep. 30, 2019 | 237,102 | $ 91 | $ 21 | 199,228 | 38,688 | (926) | ||
Ending balance, Shares at Sep. 30, 2019 | 91,312,647 | 20,502,084 | ||||||
Beginning balance at Dec. 31, 2019 | 256,855 | $ 92 | $ 20 | 205,234 | 51,859 | (350) | ||
Beginning balance, Shares at Dec. 31, 2019 | 91,819,649 | 20,314,644 | 91,819,649 | 20,314,644 | ||||
Net income | 12,696 | 12,696 | ||||||
Stock–based compensation expense | 11,793 | 11,793 | ||||||
Issuance of common stock upon exercise of stock options | 514 | 514 | ||||||
Issuance of common stock upon exercise of stock options, Shares | 160,668 | |||||||
Issuance of common stock upon vesting of restricted stock units | $ 1 | (1) | ||||||
Issuance of common stock upon vesting of restricted stock units, Shares | 308,303 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (3,397) | (3,397) | ||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (106,934) | |||||||
Conversion of common stock, shares issued | 335,741 | |||||||
Conversion of common stock, shares converted | (335,741) | |||||||
Foreign currency translation adjustment | (493) | (493) | ||||||
Ending balance at Mar. 31, 2020 | 277,968 | $ 93 | $ 20 | 214,143 | 64,555 | (843) | ||
Ending balance, Shares at Mar. 31, 2020 | 92,517,427 | 19,978,903 | ||||||
Beginning balance at Dec. 31, 2019 | 256,855 | $ 92 | $ 20 | 205,234 | 51,859 | (350) | ||
Beginning balance, Shares at Dec. 31, 2019 | 91,819,649 | 20,314,644 | 91,819,649 | 20,314,644 | ||||
Net income | 52,390 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (337,313) | |||||||
Foreign currency translation adjustment | 1,001 | |||||||
Ending balance at Sep. 30, 2020 | 338,259 | $ 94 | $ 19 | 233,246 | 104,249 | 651 | ||
Ending balance, Shares at Sep. 30, 2020 | 94,016,568 | 19,076,500 | 94,016,568 | 19,076,500 | ||||
Beginning balance at Mar. 31, 2020 | 277,968 | $ 93 | $ 20 | 214,143 | 64,555 | (843) | ||
Beginning balance, Shares at Mar. 31, 2020 | 92,517,427 | 19,978,903 | ||||||
Net income | 7,131 | 7,131 | ||||||
Stock–based compensation expense | 12,249 | 12,249 | ||||||
Issuance of common stock upon exercise of stock options | 415 | 415 | ||||||
Issuance of common stock upon exercise of stock options, Shares | 84,796 | |||||||
Issuance of common stock upon vesting of restricted stock units, Shares | 375,645 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (2,389) | (2,389) | ||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (119,009) | |||||||
Conversion of common stock, shares issued | 3,748 | |||||||
Conversion of common stock, shares converted | (3,748) | |||||||
Foreign currency translation adjustment | 481 | 481 | ||||||
Ending balance at Jun. 30, 2020 | 295,855 | $ 93 | $ 20 | 224,418 | 71,686 | (362) | ||
Ending balance, Shares at Jun. 30, 2020 | 92,862,607 | 19,975,155 | ||||||
Net income | 32,563 | 32,563 | ||||||
Stock–based compensation expense | 11,684 | 11,684 | ||||||
Issuance of common stock upon exercise of stock options | 66 | 66 | ||||||
Issuance of common stock upon exercise of stock options, Shares | 31,523 | |||||||
Issuance of common stock upon vesting of restricted stock units, Shares | 335,153 | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (2,922) | (2,922) | ||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares | (111,370) | (111,370) | ||||||
Conversion of common stock | $ 1 | |||||||
Conversion of common stock, shares issued | 898,655 | |||||||
Conversion of common stock, shares converted | (898,655) | |||||||
Conversion of common stock, value | $ (1) | |||||||
Foreign currency translation adjustment | 1,013 | 1,013 | ||||||
Ending balance at Sep. 30, 2020 | $ 338,259 | $ 94 | $ 19 | $ 233,246 | $ 104,249 | $ 651 | ||
Ending balance, Shares at Sep. 30, 2020 | 94,016,568 | 19,076,500 | 94,016,568 | 19,076,500 |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities | ||
Net income | $ 52,390 | $ 28,975 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,779 | 5,659 |
Currency gain on foreign denominated transactions | (32) | (927) |
Deferred taxes | 14,769 | (5,025) |
Provision for doubtful accounts | 1,742 | 695 |
Stock-based compensation expense | 34,403 | 25,390 |
Amortization of deferred contract costs | 8,595 | 5,797 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 5,954 | (4,984) |
Prepaid expenses, prepaid income taxes, and other assets | 7,104 | (871) |
Deferred contract costs | (6,922) | (11,442) |
Accounts payable | (19,745) | 10,740 |
Accrued expenses, accrued income taxes, and other current liabilities | (497) | (2,047) |
Deferred revenue | (313) | (1,027) |
Lease obligations | 356 | (1,882) |
Other non-current liabilities | 2,223 | 500 |
Net cash provided by operating activities | 108,806 | 49,551 |
Investing Activities | ||
Purchases of property and equipment | (2,732) | (10,765) |
Capitalization of website development costs | (3,045) | (2,074) |
Cash paid for acquisition, net of cash acquired | (21,056) | (19,139) |
Investments in certificates of deposit | (134,808) | |
Maturities of certificates of deposit | 111,692 | 122,800 |
Net cash provided by (used in) investing activities | 84,859 | (43,986) |
Financing Activities | ||
Proceeds from exercise of stock options | 995 | 1,456 |
Payment of finance lease obligations | (28) | (21) |
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (8,708) | (12,783) |
Net cash used in financing activities | (7,741) | (11,348) |
Impact of foreign currency on cash, cash equivalents, and restricted cash | 171 | (97) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 186,095 | (5,880) |
Cash, cash equivalents, and restricted cash at beginning of period | 70,723 | 37,558 |
Cash, cash equivalents, and restricted cash at end of period | 256,818 | 31,678 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 875 | 153 |
Unpaid purchases of property and equipment | 165 | 244 |
Capitalized stock-based compensation expense in website development and internal-use software costs | 1,323 | 950 |
Cash paid for operating lease liabilities | $ 10,329 | $ 8,465 |
Organization and Business Descr
Organization and Business Description | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Business Description | 1. Organization and Business Description CarGurus, Inc. (the “Company”), is a global, online automotive marketplace connecting buyers and sellers of new and used cars. Using proprietary technology, search algorithms, and innovative data analytics, the Company provides information and analysis that create a differentiated automotive search experience for consumers. The Company’s marketplace empowers users worldwide with unbiased third-party validation on pricing and dealer reputation, as well as other useful information that aids them in finding “Great Deals from Top-Rated Dealers.” The Company is headquartered in Cambridge, Massachusetts and was incorporated in the State of Delaware on June 26, 2015. The Company operates principally in the United States. In addition to the United States, i The Company also operated online marketplaces in Germany, Italy, and Spain until it ceased the operations of each of these marketplaces in the second quarter of 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying interim condensed consolidated financial statements (the “Unaudited Condensed Consolidated Financial Statements”) are unaudited. The Unaudited Condensed Consolidated Financial Statements and related disclosures have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The Unaudited Condensed Consolidated Financial Statements have also been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2020 and December 31, 2019, results of operations, comprehensive income, changes in shareholders’ equity for the three and nine months ended September 30, 2020 and 2019 and cash flows for the nine months ended September 30, 2020 and 2019. These interim period results are not necessarily indicative of the results to be expected for any other interim period or the full year. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 14, 2020 (the “Annual Report”). Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Subsequent Event Considerations The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure . Use of Estimates The preparation of the Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these Unaudited Condensed Consolidated Financial Statements Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. Concentration of Credit Risk The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments, and trade accounts receivable. The Company maintains its cash, cash equivalents, and investments principally with accredited financial institutions of high credit standing. Although the Company deposits its cash, cash equivalents, and investments with multiple financial institutions, its deposits may often exceed governmental insured limits. Credit risk with respect to accounts receivable is dispersed due to the large number of customers. The Company routinely assesses the creditworthiness of its customers. The Company generally has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable. For the three and nine months ended September 30, 2020 and 2019, no individual customer accounted for more than 10% of total revenue. As of September 30, 2020 , two customers each accounted for approximately 10% of net accounts receivable. As of December 31, 2019, one customer accounted for approximately 18% of net accounts receivable. Included in net accounts receivable at September 30, 2020 and December 31, 2019, are $6,869 and $8,880, respectively, of unbilled accounts receivable primarily related to advertising customers that are generally billed within a quarter subsequent to services being rendered. Significant Accounting Policies The Unaudited Condensed Consolidated Financial Statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the Unaudited Condensed Consolidated Financial Statements As of September 30, 2020, the Company’s significant accounting policies and estimates, which are detailed in the Annual Report, have not changed, other than those impacted by new accounting standards as described below. These changes were not material. Allowance for Credit Losses T he Company is exposed to credit losses primarily through its trade accounts receivable. The Company determines the required allowance for expected credit losses using information such as historical loss trends, current conditions, and reasonable and supportable forecasts of economic conditions such as the impacts of the . Amounts are charged against the allowance when it is determined that expected credit losses may occur. In light of the COVID-19 pandemic, the Company assessed the implications on accounts receivable and increased its allowance for doubtful accounts to $ 610 Below is a summary of the changes in the Company’s allowance for doubtful accounts for the nine months ended September 30, 2020: Balance at Beginning of Period Provision Write – Net of Recoveries Balance at End of Period Nine Months Ended September 30, 2020 $ 240 $ 1,742 $ (1,372 ) $ 610 Recent Accounting Pronouncements Adopted Goodwill and Intangibles In January 2017, the FASB issued ASU Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU . Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU Recent Accounting Pronouncements Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Revenue Recognition The following table summarizes revenue from contracts with customers by geographical region and by revenue source for the three and nine months ended September 30, 2020 and 2019. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 United States Marketplace subscription revenue $ 121,814 $ 127,807 $ 330,295 $ 365,180 Advertising and other revenue 16,598 13,830 45,869 41,870 Total 138,412 141,637 376,164 407,050 International Marketplace subscription revenue 8,139 7,735 21,477 20,301 Advertising and other revenue 921 1,090 2,257 3,412 Total 9,060 8,825 23,734 23,713 Total Revenue Marketplace subscription revenue 129,953 135,542 351,772 385,481 Advertising and other revenue 17,519 14,920 48,126 45,282 Total $ 147,472 $ 150,462 $ 399,898 $ 430,763 The Company provides disaggregation of revenue based on the United States versus International geographical region classification and based on the marketplace subscription versus advertising and other revenue classification as it believes these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”) requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of the relevant quarter end. For contracts with an original expected duration greater than one year, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied For contracts with an original expected duration of one year or less, the Company has applied the practical expedient available under Topic 606 to not disclose the amount of transaction price allocated to unsatisfied performance obligations as of September 30, 2020. For performance obligations not satisfied as of September 30, 2020, and to which this expedient applies, the nature of the performance obligations, the variable consideration and any consideration from contracts with customers not included in the transaction price are consistent with performance obligations satisfied as of September 30, 2020. Revenue recognized during the three months ended September 30, 2020 and 2019 and nine months ended September 30, 2020 and 2019, from amounts included in deferred revenue at the beginning of the period, was approximately $8,195, $8,479, $9,984 and $8,811, respectively. In response to the COVID-19 pandemic, the Company reduced the subscription fees for paying dealers by at least 50% on all marketplace subscriptions for the April and May 2020 service periods, as well as provided a fee reduction on all June 2020 marketplace subscriptions of 20% for paying dealers in the United States and Canada and 50% for paying dealers in the United Kingdom. These fee reductions resulted in a modification to contracts with initial contractual periods greater than one month. For any contract modified, the Company calculated the remaining transaction price and allocated the consideration over the remaining performance obligations. These fee reductions materially and adversely impacted revenue for the second quarter of 2020 and had an immaterial impact for the third quarter of 2020. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions On January 16, 2020, the Company acquired Autolist, an automotive shopping platform based in San Francisco, California, pursuant to an Agreement and Plan of Merger by and among the Company, Alpine Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), Auto List, Inc., a Delaware corporation (“Target”), and the securityholders’ representative therein, pursuant to which, among other things, the Company acquired Target through the merger of Merger Sub with and into Target (the “Merger”), with Target surviving as a wholly owned subsidiary of the Company. The Company paid an aggregate of $ million, net of cash acquired, to consummate the Merger. The amount paid includes $ 2.2 million that is held in escrow to secure post-closing claims. The Merger is intended to both expand the Company’s consumer audience in the United States and enhance its value proposition for subscribing dealers. As of September 30, 2020, the Company incurred total acquisition-related costs of $1.4 million related to the Merger. For the three months ended September 30, 2020, the Company incurred no acquisition-related costs. For the nine months ended September 30, 2020, the Company incurred total acquisition-related costs of $1.0 million. Acquisition-related costs were excluded from the purchase price allocation as they were primarily comprised of one-time severance and bonus related expenses. For the nine months ended September 30, 2020, $0.5 million, $0.3 million, and $0.2 million of acquisition-related costs were recorded as operating expense and allocated to product, technology, and development, general and administrative, and sales and marketing, respectively, within the Unaudited Condensed Consolidated Income Statement. The acquisition has been accounted for as a business combination under the acquisition method and, accordingly, the total purchase price is allocated to the acquired assets and assumed liabilities. The following table presents the adjusted purchase price allocation recorded in the Company’s Unaudited Condensed Consolidated Balance Sheet as of the acquisition date, which is subject to finalization for tax-related items: Adjusted Fair Value at Date of Acquisition (4) Cash and cash equivalents $ 50 Restricted cash 220 Accounts receivable 1,862 Intangible assets (1) 7,600 Goodwill (2) 12,477 Operating lease right-of-use assets 2,169 Other assets, net 162 Accounts payable and accrued expenses (358 ) Operating lease liabilities - current (446 ) Operating lease liabilities - non-current (1,723 ) Deferred tax liabilities (3) (687 ) Total purchase price $ 21,326 (1) Identifiable definite-lived intangible assets were comprised of brand, developed technology, and customer relationships of $5,600, $1,200, and $800, respectively, with estimated useful lives of 9 years, 3 years, and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives. The fair value of the brand has been estimated using the multi-period excess earnings method which is a variation of the income approach. The fair value of the developed technology and customer relationships has been estimated using a cost approach, which assesses the cost to redevelop the app and technology, and relationships, respectively. (2) The goodwill represents the excess value of the purchase price over net assets acquired. The goodwill in this transaction is primarily attributable to expected consumer traffic growth and shopper connections for dealers across both the CarGurus and Autolist websites, creating additional value for the Company’s premium subscription customers. All goodwill is assigned to the United States reporting segment. The acquisition of Autolist is treated as a stock acquisition for tax purposes and goodwill is not deductible for tax purposes. (3) The estimated deferred tax liability corresponds to the acquired intangible assets which have no tax basis. (4) The Company refined its estimates of the fair value of certain accounts included within the preliminary purchase price allocation, which resulted in an immaterial adjustment to accounts receivable, cash paid, deferred tax liability and goodwill. Actual and pro forma results for this acquisition have not been presented as the financial impact to the Company’s Unaudited Condensed Consolidated Financial Statements |
Fair Value of Financial Instrum
Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments | 5. Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at September 30, 2020 and at December 31, 2019: At September 30, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Cash equivalents: Money market funds $ 172,427 $ — $ — $ 172,427 Total $ 172,427 $ — $ — $ 172,427 At December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Cash equivalents: Money market funds $ 29,196 $ — $ — $ 29,196 Investments: Certificates of deposit — 111,692 — 111,692 Total $ 29,196 $ 111,692 $ — $ 140,888 Certificates of deposit at December 31, 2019 had maturity dates of one year or less. The Company measures eligible assets and liabilities at fair value with changes in value recognized in earnings. There were no liabilities that were measured at fair value as of September 30, 2020 and December 31, 2019. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets and did not elect the fair value option for any financial assets transacted during the nine months ended September 30, 2020 or the year ended December 31, 2019. Cash and cash equivalents primarily consist of cash on deposit with banks and amounts held in interest-bearing money market accounts. Cash equivalents are carried at cost, which approximates their fair market value. The Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Investments not classified as cash equivalents with maturities one year or less from the balance sheet date are classified as short-term investments, while investments with maturities in excess of one year from the balance sheet date are classified as long-term investments. Management determines the appropriate classification of investments at the time of purchase and re-evaluates such determination at each balance sheet date. The Company held no investments at September 30, 2020. The following is a summary of investments as of December 31, 2019: At December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Investments: Certificates of deposit due in one year or less $ 111,692 $ — $ — $ 111,692 Total $ 111,692 $ — $ — $ 111,692 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 6. Property and Equipment, Net Property and equipment, net consists of the following: At September 30, 2020 At December 31, 2019 Computer equipment $ 8,057 $ 7,923 Capitalized software 181 181 Capitalized website development 15,451 11,083 Furniture and fixtures 7,314 6,809 Leasehold improvements 20,492 19,507 Construction in progress 1,072 524 Finance lease right-of-use assets 50 78 52,617 46,105 Less accumulated depreciation and amortization (25,341 ) (18,155 ) Property and equipment, net $ 27,276 $ 27,950 Depreciation and amortization expense, excluding amortization of intangible assets, was $1,937, $1,951, $7,367, and $5,173 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 7. Goodwill and Other Intangible Assets Goodwill The changes in the carrying value of goodwill were as follows: Balance at December 31, 2019 $ 15,207 Autolist acquisition (1) 12,477 Foreign currency translation adjustment 673 Balance at September 30, 2020 $ 28,357 (1) See Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report. The Company tests goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. As a result of the COVID-19 pandemic, the Company assessed its goodwill for impairment concluding that there was no impairment as of September 30, 2020. Other Intangible Assets Intangible assets as of September 30, 2020 and December 31, 2019 consist of the following: At September 30, 2020 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Brand 8.7 $ 9,257 $ 995 $ 8,262 Customer relationships 1.8 1,866 782 1,084 Developed technology 2.3 1,200 284 916 Total $ 12,323 $ 2,061 $ 10,262 At December 31, 2019 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Brand 10.0 $ 3,524 $ 313 $ 3,211 Customer relationships 2.0 1,045 336 709 Total $ 4,569 $ 649 $ 3,920 The Company recorded amortization expense related to intangible assets of $495, $167, $1,412, and $486 for the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020, and 2019, respectively The estimated useful life of the PistonHeads brand and customer relationships is 11 years and 3 years, respectively. The estimated useful life of the Autolist brand, customer relationships and developed technology is 9 years, 3 years, and 3 years, respectively. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. As a result of the COVID-19 pandemic, the Company assessed its long-lived assets for impairment and concluded that there was no impairment as of September 30, 2020. Estimated amortization expense of intangible assets for future periods as of September 30, 2020 is as follows: Year Ending December 31, Amortization Expense Remainder of 2020 $ 484 2021 1,938 2022 1,704 2023 971 2024 953 2025 953 Thereafter 3,259 Total $ 10,262 |
Accrued Expenses, Accrued Incom
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities Current [Abstract] | |
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities | 8. Accrued Expenses, Accrued Income Taxes and Other Current Liabilities Accrued expenses, accrued income taxes and other current liabilities consist of the following: At September 30, 2020 At December 31, 2019 Accrued bonus $ 8,841 $ 8,637 Accrued commissions 2,824 3,153 Other accrued expenses, accrued income taxes and other current liabilities 6,213 6,472 Total $ 17,878 $ 18,262 |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 9. Restructuring On April 13, 2020, the Board of Directors of the Company approved an expense reduction plan to address the impact of the COVID-19 pandemic on the Company’s business (the “Expense Reduction Plan”), pursuant to which the Company initiated a reduction in its workforce of approximately 13%, ceased operation of its Germany, Italy and Spain marketplaces, and halted expansion efforts in any new international markets. The Expense Reduction Plan was completed in the second quarter of 2020 and during such quarter resulted in restructuring charges of $3,248 for employee severance and related benefits expense and $1,019 The following table summarizes restructuring accrual activity for employee severance and related benefits expense for the nine months ended September 30, 2020: Employee Severance and Related Benefits Balance at December 31, 2019 $ — Charges 3,248 Cash disbursements (2,581 ) Noncash settlements (667 ) Balance at September 30, 2020 $ — For the three months ended September 30, 2020, no employee severance and related benefits expense was recorded. For the nine months ended September 30, 2020, $2,160, $737, $207, and $144 of employee severance and related benefits expense was recorded as sales and marketing, product, technology, and development, cost of revenue, and general and administrative All of the accrued e were paid as of September 30, 2020 and were recorded within on the Unaudited Condensed Consolidated Balance Sheets, prior to payout. For the nine months ended September 30, 2020, $667 of employee For the three months ended September 30, 2020, no write-off of capitalized website development costs or deferred was recorded. were recorded as cost of revenue and sales and marketing, respectively, within the Unaudited Condensed Consolidated Income Statement. was recorded as depreciation and amortization within the . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Contractual Obligations and Commitments All of the Company’s property, equipment, and internal-use software have been purchased with cash with the exception of amounts related to unpaid property and equipment as disclosed in the Unaudited Condensed Consolidated Statements of Cash Flows and immaterial amounts Leases The Company’s primary operating lease obligations consist of various leases for office space in: Boston, Massachusetts; Cambridge, Massachusetts; San Francisco, California; and Dublin, Ireland. The Company also has an operating lease obligation for data center space in Needham, Massachusetts. As of September 30, 2020, there were no material changes in the Company’s material leases from those disclosed in the Annual Report, other than as discussed below. On June 12, 2020, the Company amended its operating lease agreement in Boston, Massachusetts at 1001 Boylston Street, which was originally entered into on December 19, 2019. Pursuant to this amendment, the Company exercised its right to reduce the amount of office space agreed to under the lease to 225,428 square feet, and the parties agreed to certain other changes to the lease as set forth in the amendment. As the lease has been signed but the lease term has not commenced, there is no impact to the Unaudited Condensed Consolidated Financial Statements. On January 10, 2019, Auto List, Inc., which the Company acquired on January 16, 2020, entered into an operating lease in San Francisco, California at 332 Pine St. for the lease of 6,345 square feet of office space with a non-cancellable lease term through 2024. The lease provides for annual rent increases through the term of the lease. The Company’s leases in Boston, Massachusetts, Cambridge, Massachusetts and San Francisco, California have associated letters of credit, which are recorded as restricted cash within the Unaudited Condensed Consolidated Balance Sheet. At September 30, 2020 and December 31, 2019, restricted cash was $10,877 and $10,803, respectively, and primarily related to cash held at a financial institution in an interest‑bearing cash account as collateral for the letters of credit related to the contractual provisions for the Company’s building leases. At September 30, 2020 and December 31, 2019, portions of restricted cash were classified as a short-term asset and long‑term asset, as disclosed on the Unaudited Condensed Consolidated Balance Sheet. Legal Matters From time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. The Company is not presently subject to any pending or threatened litigation that it believes, if determined adversely to the Company, individually, or taken together, would reasonably be expected to have a material adverse effect on its business or financial results. Guarantees and Indemnification Obligations In the ordinary course of business, the Company enters into agreements with its customers, partners and service providers that include commercial provisions with respect to licensing, infringement, indemnification, and other common provisions. The Company does not, in the ordinary course, agree to guaranty or indemnification obligations for the Company under its contracts with customers. Based on historical experience and information known at September 30, 2020 and December 31, 2019, |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | 11. Stock-based Compensation The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s Unaudited Condensed Consolidated Income Statements Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Options $ — $ 35 $ 17 $ 130 Restricted stock units 11,030 8,726 34,617 25,260 Total stock-based compensation expense $ 11,030 $ 8,761 $ 34,634 $ 25,390 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenue $ 57 $ 92 $ 241 $ 268 Sales and marketing expense 2,450 2,520 8,206 7,392 Product, technology, and development expense 5,140 3,938 15,861 11,118 General and administrative expense 3,383 2,211 10,326 6,612 Total stock-based compensation expense $ 11,030 $ 8,761 $ 34,634 $ 25,390 Excluded from stock-based compensation expense is $656, $324, $1,323, and $950 of capitalized website development and internal-use software costs for the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020, and 2019, respectively. During the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020 and 2019 , the Company withheld 111,370 , 120,943 , 337,313 , and 345,114 shares of Class A common stock, respectively, to satisfy employee tax withholding requirements and option exercise costs due to net share settlements and cashless exercises of options . The shares withheld return to the authorized, but unissued pool under the Company’s Omnibus Equity Compensation Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements and for option exercise costs were $2,922 , $4,192 , $8,708 , and $12,783 for the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020 , and 2019 , respectively , and are reflected as a financing activity within the Unaudited Condensed Consolidated Statements of Cash Flows . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 12. Earnings Per Share Net income per share for the three and nine months ended September 30, 2020 and 2019 is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. The Company computes the weighted-average number of common shares outstanding during the reporting period using the total number of shares of Class A common stock and Class B common stock outstanding as of the last day of the previous year end reporting period plus the weighted-average of any additional shares issued and outstanding during the reporting period. The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including on either the death or voluntary termination of the Company’s Chief Executive Officer. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one During the three months ended September 30, 2020 and 2019, holders of Class B common stock converted 898,655 and 200,000 shares of Class B common stock to Class A common stock, respectively. During the nine months ended September 30, 2020 and 2019, holders of Class B common stock converted 1,238,144 200,000 shares of Class B common stock to Class A common stock, respectively. Diluted net income per share gives effect to all potentially dilutive securities. Potential dilutive securities for the three and nine months ended September 30, 2020 and 2019 consist of shares of common stock issuable upon the exercise of stock options and shares of common stock issuable upon the vesting of restricted stock units (“RSUs”). The dilutive effect of these common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. For the three and nine months ended September 30, 2020 and 2019, diluted net income per share was calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period plus the dilutive impact of stock options and shares of common stock issuable upon the vesting of RSUs. The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net income $ 32,563 $ 10,384 $ 52,390 $ 28,975 Denominator: Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic 113,027,995 111,662,949 112,707,003 111,257,271 Dilutive effect of share equivalents resulting from stock options 632,581 1,052,758 701,176 1,232,754 Dilutive effect of share equivalents resulting from unvested restricted stock units 306,287 649,068 324,437 899,670 Weighted-average number of shares of common stock used in computing net income per share — diluted 113,966,863 113,364,775 113,732,616 113,389,695 Net income per share attributable to common stockholders: Basic $ 0.29 $ 0.09 $ 0.46 $ 0.26 Diluted $ 0.29 $ 0.09 $ 0.46 $ 0.26 The following potentially dilutive common stock equivalents have been excluded from the calculation of diluted weighted-average shares outstanding for the three and nine months ended September 30, 2020 and 2019, as their effect would have been anti-dilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Restricted stock units outstanding 2,577,713 1,421,473 2,893,491 1,191,286 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes During the three months ended September 30, 2020, the Company recorded an income tax provision of $11,209, representing an effective tax rate of 25.6%. The effective tax rate for the three months ended September 30, 2020 was higher than the statutory tax rate of 21% principally due to state and local income taxes, partially offset by federal and state research and development tax credits. During the three months ended September 30, 2019, the Company recorded income tax provision of $330, representing an effective tax rate of 3.1%. The effective tax rate for the three months ended September 30, 2019 was lower than the statutory tax rate of 21% principally due to excess stock deductions from the taxable compensation of share-based awards and federal and state research and development tax credits, partially offset by state and local income taxes. During the nine months ended September 30, 2020, the Company recorded an income tax provision of $13,312 representing an effective tax rate of During the nine months ended September 30, 2019, the Company recorded an income tax benefit of $4,783, representing an effective tax rate of The Company and its subsidiaries are subject to various United States federal, state, and foreign income taxes. The Company is currently open to examination by the Internal Revenue Service (the “IRS”) and state jurisdictions for the tax years of 2017 and after. The Company is currently open to examination in its foreign jurisdictions for tax years 2017 and after. In 2019, the IRS commenced a federal employment tax audit with respect to the 2016, 2017 and 2018 calendar years, which is still open. In July 2020, the IRS commenced a corporate income tax audit with respect to the 2017 calendar year, which is still open. In August 2020, New York State commenced a sales and use tax audit with respect to 2014 – 2020 sales and use taxes, which is still open. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Among other things, the CARES Act includes a net operating loss (“NOL”) carryback provision allowing for NOLs from the 2018, 2019 and 2020 tax years to be used to offset taxable income for the tax years from 2013 to 2017. The Company filed a carryback claim, from which it received a refund of $3,863 during the three months ended September 30, 2020, and will reduce its current gross NOL balance by approximately $18,723 and increase its deferred federal research and development credit by approximately $2,645. The Company does not expect this election to negatively impact its analysis on the valuation allowance for its NOLs or deferred federal research and development credit. The CARES Act also updates the Tax Cuts and Jobs Act of 2017, allowing for the depreciation of leasehold improvements over 15 years, rather than 39 years, and eligibility for bonus depreciation, rather than non-eligibility for bonus depreciation. The Company has made an estimate for the impact as it relates to the 2019 tax year and will file its 2019 return in accordance with the updated guidance in the CARES Act. The CARES Act includes other provisions that may be utilized if the Company meets the eligibility requirements. Although the Company continues to review and evaluate the potential impact and benefit of the CARES Act on its entire business, the Company has primarily focused its review on two provisions that affect both income taxes and non-income taxes. First, the CARES Act temporarily removes the 80% limitation on NOLs to offset taxable income for tax years prior to 2021. Second, the CARES Act allows for the deferral of the employer portion of the Social Security Tax for up to two years, with half due by December 31, 2021 and the remainder due by December 31, 2022. On July 20, 2020, the IRS issued final regulations that provide for a high-tax exception to the Global Intangible Low-Taxed Income (“GILTI”) tax. Specifically, if foreign earnings are subject to a foreign tax rate of at least 90% of the U.S. tax rate, an election can be made to not treat the high-taxed earnings as GILTI income. The final regulations provide the ability for taxpayers to retroactively apply the GILTI high-tax exclusion on an amended return for tax years 2018 and 2019. As a result of the final regulations, the Company is able to exclude certain foreign earnings from its forecasted 2020 GILTI income. With respect to prior tax years, the Company did not have GILTI income in 2018 or 2019 and, therefore, does not have the ability to recognize a benefit by applying the high tax exclusion retroactively. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 14. Segment and Geographic Information The Company has two reportable segments, United States and International. Segment information is presented in the same manner as the Company’s chief operating decision maker (the “CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews revenue and operating income (loss) for each reportable segment as a proxy for the operating performance of the Company’s United States and International operations. The Company’s Chief Executive Officer is the CODM on behalf of both reportable segments. The United States segment derives revenues from marketplace subscriptions, advertising services, and other revenues from customers within the United States. The International segment derives revenues from marketplace subscriptions, advertising services, and other revenues from customers outside of the United States. A majority of the Company’s operational overhead expenses, including technology and personnel costs, and other general and administrative costs associated with running the Company’s business, are incurred in the United States and not allocated to the International segment. Revenue and costs discretely incurred by reportable segments, including depreciation and amortization, are included in the calculation of reportable segment income (loss) from operations. Segment operating income (loss) does not reflect the transfer pricing adjustments related to the Company’s foreign subsidiaries, which are recorded for statutory reporting purposes. Asset information is assessed and reviewed on a global basis. Information regarding the Company’s operations by segment and geographical area is presented as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Segment revenue: United States $ 138,412 $ 141,637 $ 376,164 $ 407,050 International 9,060 8,825 23,734 23,713 Total revenue $ 147,472 $ 150,462 $ 399,898 $ 430,763 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Segment income (loss) from operations: United States $ 46,462 $ 19,956 $ 82,061 $ 51,456 International (2,895 ) (10,252 ) (17,766 ) (30,769 ) Total income from operations $ 43,567 $ 9,704 $ 64,295 $ 20,687 For the three months ended September 30, 2020, no employee severance and related benefits expense was recorded. For the nine months ended September 30, 2020, employee severance and related benefits expense attributable to the United States and International segments were $2,492 and $756, respectively. For the three months ended September 30, 2020, no write-off of capitalized website development costs or deferred contract costs from international marketplaces was recorded. For the nine months ended September 30, 2020, the entirety of the write-off of capitalized website development costs and deferred contract costs from international marketplaces was attributable to the International segment. The Company ceased the operations of the International segment online marketplaces in Germany, Italy, and Spain in the second quarter of 2020. As of September 30, 2020 As of December 31, 2019 , total assets held outside of the United States were $32,528, primarily attributable to $15,207 of goodwill and $3,920 of intangible assets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements (the “Unaudited Condensed Consolidated Financial Statements”) are unaudited. The Unaudited Condensed Consolidated Financial Statements and related disclosures have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The Unaudited Condensed Consolidated Financial Statements have also been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2020 and December 31, 2019, results of operations, comprehensive income, changes in shareholders’ equity for the three and nine months ended September 30, 2020 and 2019 and cash flows for the nine months ended September 30, 2020 and 2019. These interim period results are not necessarily indicative of the results to be expected for any other interim period or the full year. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 14, 2020 (the “Annual Report”). |
Principles of Consolidation | Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Subsequent Event Considerations | Subsequent Event Considerations The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure . |
Use of Estimates | Use of Estimates The preparation of the Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these Unaudited Condensed Consolidated Financial Statements Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. |
Concentration of Credit Risk | Concentration of Credit Risk The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments, and trade accounts receivable. The Company maintains its cash, cash equivalents, and investments principally with accredited financial institutions of high credit standing. Although the Company deposits its cash, cash equivalents, and investments with multiple financial institutions, its deposits may often exceed governmental insured limits. Credit risk with respect to accounts receivable is dispersed due to the large number of customers. The Company routinely assesses the creditworthiness of its customers. The Company generally has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable. For the three and nine months ended September 30, 2020 and 2019, no individual customer accounted for more than 10% of total revenue. As of September 30, 2020 , two customers each accounted for approximately 10% of net accounts receivable. As of December 31, 2019, one customer accounted for approximately 18% of net accounts receivable. Included in net accounts receivable at September 30, 2020 and December 31, 2019, are $6,869 and $8,880, respectively, of unbilled accounts receivable primarily related to advertising customers that are generally billed within a quarter subsequent to services being rendered. |
Significant Accounting Policies | Significant Accounting Policies The Unaudited Condensed Consolidated Financial Statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the Unaudited Condensed Consolidated Financial Statements As of September 30, 2020, the Company’s significant accounting policies and estimates, which are detailed in the Annual Report, have not changed, other than those impacted by new accounting standards as described below. These changes were not material. |
Allowance for Credit Losses | Allowance for Credit Losses T he Company is exposed to credit losses primarily through its trade accounts receivable. The Company determines the required allowance for expected credit losses using information such as historical loss trends, current conditions, and reasonable and supportable forecasts of economic conditions such as the impacts of the . Amounts are charged against the allowance when it is determined that expected credit losses may occur. In light of the COVID-19 pandemic, the Company assessed the implications on accounts receivable and increased its allowance for doubtful accounts to $ 610 Below is a summary of the changes in the Company’s allowance for doubtful accounts for the nine months ended September 30, 2020: Balance at Beginning of Period Provision Write – Net of Recoveries Balance at End of Period Nine Months Ended September 30, 2020 $ 240 $ 1,742 $ (1,372 ) $ 610 |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted Goodwill and Intangibles In January 2017, the FASB issued ASU Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU . Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU |
Goodwill and Intangibles | Goodwill and Intangibles In January 2017, the FASB issued ASU Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ASU . The Company tests goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. As a result of the COVID-19 pandemic, the Company assessed its goodwill for impairment concluding that there was no impairment as of September 30, 2020. |
Credit Losses | Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU |
Recent Accounting Pronouncements not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes |
Income Taxes | Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes |
Revenue Recognition | Revenue Recognition The following table summarizes revenue from contracts with customers by geographical region and by revenue source for the three and nine months ended September 30, 2020 and 2019. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 United States Marketplace subscription revenue $ 121,814 $ 127,807 $ 330,295 $ 365,180 Advertising and other revenue 16,598 13,830 45,869 41,870 Total 138,412 141,637 376,164 407,050 International Marketplace subscription revenue 8,139 7,735 21,477 20,301 Advertising and other revenue 921 1,090 2,257 3,412 Total 9,060 8,825 23,734 23,713 Total Revenue Marketplace subscription revenue 129,953 135,542 351,772 385,481 Advertising and other revenue 17,519 14,920 48,126 45,282 Total $ 147,472 $ 150,462 $ 399,898 $ 430,763 The Company provides disaggregation of revenue based on the United States versus International geographical region classification and based on the marketplace subscription versus advertising and other revenue classification as it believes these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”) requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of the relevant quarter end. For contracts with an original expected duration greater than one year, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied For contracts with an original expected duration of one year or less, the Company has applied the practical expedient available under Topic 606 to not disclose the amount of transaction price allocated to unsatisfied performance obligations as of September 30, 2020. For performance obligations not satisfied as of September 30, 2020, and to which this expedient applies, the nature of the performance obligations, the variable consideration and any consideration from contracts with customers not included in the transaction price are consistent with performance obligations satisfied as of September 30, 2020. Revenue recognized during the three months ended September 30, 2020 and 2019 and nine months ended September 30, 2020 and 2019, from amounts included in deferred revenue at the beginning of the period, was approximately $8,195, $8,479, $9,984 and $8,811, respectively. In response to the COVID-19 pandemic, the Company reduced the subscription fees for paying dealers by at least 50% on all marketplace subscriptions for the April and May 2020 service periods, as well as provided a fee reduction on all June 2020 marketplace subscriptions of 20% for paying dealers in the United States and Canada and 50% for paying dealers in the United Kingdom. These fee reductions resulted in a modification to contracts with initial contractual periods greater than one month. For any contract modified, the Company calculated the remaining transaction price and allocated the consideration over the remaining performance obligations. These fee reductions materially and adversely impacted revenue for the second quarter of 2020 and had an immaterial impact for the third quarter of 2020. |
Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments | The Company measures eligible assets and liabilities at fair value with changes in value recognized in earnings. There were no liabilities that were measured at fair value as of September 30, 2020 and December 31, 2019. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets and did not elect the fair value option for any financial assets transacted during the nine months ended September 30, 2020 or the year ended December 31, 2019. Cash and cash equivalents primarily consist of cash on deposit with banks and amounts held in interest-bearing money market accounts. Cash equivalents are carried at cost, which approximates their fair market value. The Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Investments not classified as cash equivalents with maturities one year or less from the balance sheet date are classified as short-term investments, while investments with maturities in excess of one year from the balance sheet date are classified as long-term investments. Management determines the appropriate classification of investments at the time of purchase and re-evaluates such determination at each balance sheet date. |
Earnings Per Share | Net income per share for the three and nine months ended September 30, 2020 and 2019 is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. The Company computes the weighted-average number of common shares outstanding during the reporting period using the total number of shares of Class A common stock and Class B common stock outstanding as of the last day of the previous year end reporting period plus the weighted-average of any additional shares issued and outstanding during the reporting period. The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including on either the death or voluntary termination of the Company’s Chief Executive Officer. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Changes in Allowance for Doubtful Accounts | Below is a summary of the changes in the Company’s allowance for doubtful accounts for the nine months ended September 30, 2020: Balance at Beginning of Period Provision Write – Net of Recoveries Balance at End of Period Nine Months Ended September 30, 2020 $ 240 $ 1,742 $ (1,372 ) $ 610 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenue from Contracts with Customers by Geographical Region and by Revenue | The following table summarizes revenue from contracts with customers by geographical region and by revenue source for the three and nine months ended September 30, 2020 and 2019. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 United States Marketplace subscription revenue $ 121,814 $ 127,807 $ 330,295 $ 365,180 Advertising and other revenue 16,598 13,830 45,869 41,870 Total 138,412 141,637 376,164 407,050 International Marketplace subscription revenue 8,139 7,735 21,477 20,301 Advertising and other revenue 921 1,090 2,257 3,412 Total 9,060 8,825 23,734 23,713 Total Revenue Marketplace subscription revenue 129,953 135,542 351,772 385,481 Advertising and other revenue 17,519 14,920 48,126 45,282 Total $ 147,472 $ 150,462 $ 399,898 $ 430,763 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Summary of Preliminary Purchase Price Allocation | The following table presents the adjusted purchase price allocation recorded in the Company’s Unaudited Condensed Consolidated Balance Sheet as of the acquisition date, which is subject to finalization for tax-related items: Adjusted Fair Value at Date of Acquisition (4) Cash and cash equivalents $ 50 Restricted cash 220 Accounts receivable 1,862 Intangible assets (1) 7,600 Goodwill (2) 12,477 Operating lease right-of-use assets 2,169 Other assets, net 162 Accounts payable and accrued expenses (358 ) Operating lease liabilities - current (446 ) Operating lease liabilities - non-current (1,723 ) Deferred tax liabilities (3) (687 ) Total purchase price $ 21,326 (1) Identifiable definite-lived intangible assets were comprised of brand, developed technology, and customer relationships of $5,600, $1,200, and $800, respectively, with estimated useful lives of 9 years, 3 years, and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives. The fair value of the brand has been estimated using the multi-period excess earnings method which is a variation of the income approach. The fair value of the developed technology and customer relationships has been estimated using a cost approach, which assesses the cost to redevelop the app and technology, and relationships, respectively. (2) The goodwill represents the excess value of the purchase price over net assets acquired. The goodwill in this transaction is primarily attributable to expected consumer traffic growth and shopper connections for dealers across both the CarGurus and Autolist websites, creating additional value for the Company’s premium subscription customers. All goodwill is assigned to the United States reporting segment. The acquisition of Autolist is treated as a stock acquisition for tax purposes and goodwill is not deductible for tax purposes. (3) The estimated deferred tax liability corresponds to the acquired intangible assets which have no tax basis. (4) The Company refined its estimates of the fair value of certain accounts included within the preliminary purchase price allocation, which resulted in an immaterial adjustment to accounts receivable, cash paid, deferred tax liability and goodwill. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis | The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at September 30, 2020 and at December 31, 2019: At September 30, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Cash equivalents: Money market funds $ 172,427 $ — $ — $ 172,427 Total $ 172,427 $ — $ — $ 172,427 At December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Cash equivalents: Money market funds $ 29,196 $ — $ — $ 29,196 Investments: Certificates of deposit — 111,692 — 111,692 Total $ 29,196 $ 111,692 $ — $ 140,888 |
Schedule of Investments | The Company held no investments at September 30, 2020. The following is a summary of investments as of December 31, 2019: At December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Investments: Certificates of deposit due in one year or less $ 111,692 $ — $ — $ 111,692 Total $ 111,692 $ — $ — $ 111,692 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following: At September 30, 2020 At December 31, 2019 Computer equipment $ 8,057 $ 7,923 Capitalized software 181 181 Capitalized website development 15,451 11,083 Furniture and fixtures 7,314 6,809 Leasehold improvements 20,492 19,507 Construction in progress 1,072 524 Finance lease right-of-use assets 50 78 52,617 46,105 Less accumulated depreciation and amortization (25,341 ) (18,155 ) Property and equipment, net $ 27,276 $ 27,950 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Value of Goodwill | The changes in the carrying value of goodwill were as follows: Balance at December 31, 2019 $ 15,207 Autolist acquisition (1) 12,477 Foreign currency translation adjustment 673 Balance at September 30, 2020 $ 28,357 (1) See Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report. |
Summary of Other Intangible Assets | Intangible assets as of September 30, 2020 and December 31, 2019 consist of the following: At September 30, 2020 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Brand 8.7 $ 9,257 $ 995 $ 8,262 Customer relationships 1.8 1,866 782 1,084 Developed technology 2.3 1,200 284 916 Total $ 12,323 $ 2,061 $ 10,262 At December 31, 2019 Weighted Average Remaining Useful Life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Brand 10.0 $ 3,524 $ 313 $ 3,211 Customer relationships 2.0 1,045 336 709 Total $ 4,569 $ 649 $ 3,920 |
Summary of Estimated Amortization Expense of Intangible Assets | Estimated amortization expense of intangible assets for future periods as of September 30, 2020 is as follows: Year Ending December 31, Amortization Expense Remainder of 2020 $ 484 2021 1,938 2022 1,704 2023 971 2024 953 2025 953 Thereafter 3,259 Total $ 10,262 |
Accrued Expenses, Accrued Inc_2
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities Current [Abstract] | |
Schedule of Accrued Expenses, Accrued Income Taxes and Other Current Liabilities | Accrued expenses, accrued income taxes and other current liabilities consist of the following: At September 30, 2020 At December 31, 2019 Accrued bonus $ 8,841 $ 8,637 Accrued commissions 2,824 3,153 Other accrued expenses, accrued income taxes and other current liabilities 6,213 6,472 Total $ 17,878 $ 18,262 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Summary of Restructuring Accrual Activity for Employee Severance and Related Benefits Expense | The following table summarizes restructuring accrual activity for employee severance and related benefits expense for the nine months ended September 30, 2020: Employee Severance and Related Benefits Balance at December 31, 2019 $ — Charges 3,248 Cash disbursements (2,581 ) Noncash settlements (667 ) Balance at September 30, 2020 $ — |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-based Compensation Expense by Award Type | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Options $ — $ 35 $ 17 $ 130 Restricted stock units 11,030 8,726 34,617 25,260 Total stock-based compensation expense $ 11,030 $ 8,761 $ 34,634 $ 25,390 |
Summary of Allocation of Stock-based Compensation Expense | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenue $ 57 $ 92 $ 241 $ 268 Sales and marketing expense 2,450 2,520 8,206 7,392 Product, technology, and development expense 5,140 3,938 15,861 11,118 General and administrative expense 3,383 2,211 10,326 6,612 Total stock-based compensation expense $ 11,030 $ 8,761 $ 34,634 $ 25,390 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income Per Share | The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net income $ 32,563 $ 10,384 $ 52,390 $ 28,975 Denominator: Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic 113,027,995 111,662,949 112,707,003 111,257,271 Dilutive effect of share equivalents resulting from stock options 632,581 1,052,758 701,176 1,232,754 Dilutive effect of share equivalents resulting from unvested restricted stock units 306,287 649,068 324,437 899,670 Weighted-average number of shares of common stock used in computing net income per share — diluted 113,966,863 113,364,775 113,732,616 113,389,695 Net income per share attributable to common stockholders: Basic $ 0.29 $ 0.09 $ 0.46 $ 0.26 Diluted $ 0.29 $ 0.09 $ 0.46 $ 0.26 |
Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding | The following potentially dilutive common stock equivalents have been excluded from the calculation of diluted weighted-average shares outstanding for the three and nine months ended September 30, 2020 and 2019, as their effect would have been anti-dilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Restricted stock units outstanding 2,577,713 1,421,473 2,893,491 1,191,286 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Operations by Segment and Geographical Area | Information regarding the Company’s operations by segment and geographical area is presented as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Segment revenue: United States $ 138,412 $ 141,637 $ 376,164 $ 407,050 International 9,060 8,825 23,734 23,713 Total revenue $ 147,472 $ 150,462 $ 399,898 $ 430,763 Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Segment income (loss) from operations: United States $ 46,462 $ 19,956 $ 82,061 $ 51,456 International (2,895 ) (10,252 ) (17,766 ) (30,769 ) Total income from operations $ 43,567 $ 9,704 $ 64,295 $ 20,687 |
Organization and Business Des_2
Organization and Business Description - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
State of incorporation | DE |
Date of incorporation | Jun. 26, 2015 |
Number of reportable segments | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)Customer | Sep. 30, 2019Customer | Sep. 30, 2020USD ($)Customer | Sep. 30, 2019USD ($)Customer | Dec. 31, 2019USD ($)Customer | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Description of significant off-balance sheet risk | The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. | ||||
Allowance for doubtful accounts | $ 610 | $ 610 | $ 240 | ||
Bad debt expense | 1,742 | $ 695 | |||
Allowance for doubtful accounts write offs, net | $ 1,372 | ||||
ASU 2017-04 | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Change in accounting principle, accounting standards update, adopted | true | true | |||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 | Jan. 1, 2020 | |||
Change in accounting principle, accounting standards update, immaterial effect | true | true | |||
Change in accounting principle, accounting standards update, transition option elected | carg:AccountingStandardsUpdate201704ProspectiveMember | ||||
ASU 2016-13 | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Change in accounting principle, accounting standards update, adopted | true | true | |||
Change in accounting principle, accounting standards update, adoption date | Jan. 1, 2020 | Jan. 1, 2020 | |||
Change in accounting principle, accounting standards update, immaterial effect | true | true | |||
Change in accounting principle, accounting standards update, transition option elected | carg:AccountingStandardsUpdate201613ProspectiveMember | ||||
Sales Revenue, Net | Concentration of Credit Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration of credit risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% | |
Number of major customers | Customer | 0 | 0 | 0 | 0 | |
Net Accounts Receivable | Advertising Customers | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Unbilled accounts receivable | $ 6,869 | $ 6,869 | $ 8,880 | ||
Net Accounts Receivable | Concentration of Credit Risk | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of major customers | Customer | 2 | 1 | |||
Net Accounts Receivable | Concentration of Credit Risk | Customer Two | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration of credit risk, percentage | 10.00% | ||||
Net Accounts Receivable | Concentration of Credit Risk | Customer One | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration of credit risk, percentage | 10.00% | 18.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||
Balance at Beginning of Period | $ 240 | |
Provision for doubtful accounts | 1,742 | $ 695 |
Write–offs, Net of Recoveries | (1,372) | |
Balance at End of Period | $ 610 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenue from Contracts with Customers by Geographical Region and by Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 147,472 | $ 150,462 | $ 399,898 | $ 430,763 |
Marketplace Subscription Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 129,953 | 135,542 | 351,772 | 385,481 |
Advertising and Other Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 17,519 | 14,920 | 48,126 | 45,282 |
United States | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 138,412 | 141,637 | 376,164 | 407,050 |
United States | Marketplace Subscription Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 121,814 | 127,807 | 330,295 | 365,180 |
United States | Advertising and Other Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 16,598 | 13,830 | 45,869 | 41,870 |
International | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 9,060 | 8,825 | 23,734 | 23,713 |
International | Marketplace Subscription Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 8,139 | 7,735 | 21,477 | 20,301 |
International | Advertising and Other Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 921 | $ 1,090 | $ 2,257 | $ 3,412 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | May 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||||
Performance obligation unsatisfied | $ 15,600 | $ 15,600 | ||||
Revenue recognized | $ 8,195,000 | $ 8,479,000 | $ 9,984,000 | $ 8,811,000 | ||
All Marketplace Subscriptions | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Percentage fee reduction on marketplace subscription services | 50.00% | |||||
United States | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Percentage fee reduction on marketplace subscription services | 20.00% | |||||
Canada | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Percentage fee reduction on marketplace subscription services | 20.00% | |||||
United Kingdom | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Percentage fee reduction on marketplace subscription services | 50.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Jan. 16, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||
Acquisition-related costs incurred | $ 0 | $ 1,000,000 | |
Product, Technology, and Development | |||
Business Acquisition [Line Items] | |||
Acquisition-related costs incurred | 500,000 | ||
General and Administrative | |||
Business Acquisition [Line Items] | |||
Acquisition-related costs incurred | 300,000 | ||
Sales and Marketing | |||
Business Acquisition [Line Items] | |||
Acquisition-related costs incurred | 200,000 | ||
Autolist, Inc | San Francisco, California | |||
Business Acquisition [Line Items] | |||
Business acquisition date | Jan. 16, 2020 | ||
Payments to acquire business | $ 21,100,000 | ||
Amount held in escrow | $ 2,200,000 | ||
Acquisition-related costs incurred | $ 1,400,000 | $ 1,400,000 |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Purchase Price Allocation (Details) - Autolist, Inc $ in Thousands | Jan. 16, 2020USD ($) | [1] |
Business Acquisition [Line Items] | ||
Cash and cash equivalents, Adjusted Fair Value at Date of Acquisition | $ 50 | |
Restricted cash, Adjusted Fair Value at Date of Acquisition | 220 | |
Accounts receivable, Adjusted Fair Value at Date of Acquisition | 1,862 | |
Intangible assets, Adjusted Fair Value at Date of Acquisition | 7,600 | [2] |
Goodwill, Adjusted Fair Value at Date of Acquisition | 12,477 | [3] |
Operating lease right-of-use assets, Adjusted Fair Value at Date of Acquisition | 2,169 | |
Other assets, net, Adjusted Fair Value at Date of Acquisition | 162 | |
Accounts payable and accrued expenses, Adjusted Fair Value at Date of Acquisition | (358) | |
Operating lease liabilities - current, Adjusted Fair Value at Date of Acquisition | (446) | |
Operating lease liabilities - non-current, Adjusted Fair Value at Date of Acquisition | (1,723) | |
Deferred tax liabilities, Adjusted Fair Value at Date of Acquisition | (687) | [4] |
Total purchase price, Adjusted Fair Value at Date of Acquisition | $ 21,326 | |
[1] | The Company refined its estimates of the fair value of certain accounts included within the preliminary purchase price allocation, which resulted in an immaterial adjustment to accounts receivable, cash paid, deferred tax liability and goodwill. | |
[2] | Identifiable definite-lived intangible assets were comprised of brand, developed technology, and customer relationships of $5,600, $1,200, and $800, respectively, with estimated useful lives of 9 years, 3 years, and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives. The fair value of the brand has been estimated using the multi-period excess earnings method which is a variation of the income approach. The fair value of the developed technology and customer relationships has been estimated using a cost approach, which assesses the cost to redevelop the app and technology, and relationships, respectively. | |
[3] | The goodwill represents the excess value of the purchase price over net assets acquired. The goodwill in this transaction is primarily attributable to expected consumer traffic growth and shopper connections for dealers across both the CarGurus and Autolist websites, creating additional value for the Company’s premium subscription customers. All goodwill is assigned to the United States reporting segment. The acquisition of Autolist is treated as a stock acquisition for tax purposes and goodwill is not deductible for tax purposes. | |
[4] | The estimated deferred tax liability corresponds to the acquired intangible assets which have no tax basis. |
Acquisitions - Summary of Pre_2
Acquisitions - Summary of Preliminary Purchase Price Allocation (Parenthetical) (Details) - Autolist, Inc - USD ($) $ in Thousands | Jan. 16, 2020 | Sep. 30, 2020 |
Brand | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 5,600 | |
Estimated useful lives | 9 years | 9 years |
Developed Technology | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 1,200 | |
Estimated useful lives | 3 years | 3 years |
Customer Relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 800 | |
Estimated useful lives | 3 years | 3 years |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments - Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments: | $ 111,692 | |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Held-to-maturity, Type [Extensible List] | us-gaap:CertificatesOfDepositMember | us-gaap:CertificatesOfDepositMember |
Total | $ 172,427 | $ 140,888 |
Investments: | 111,692 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 172,427 | $ 29,196 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2 Inputs) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Held-to-maturity, Type [Extensible List] | us-gaap:CertificatesOfDepositMember | us-gaap:CertificatesOfDepositMember |
Total | $ 111,692 | |
Investments: | 111,692 | |
Fair Value, Measurements, Recurring | Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | $ 172,427 | 29,196 |
Fair Value, Measurements, Recurring | Money Market Funds | Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | $ 172,427 | $ 29,196 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Maturity period of certificates of deposit | 1 year | 1 year |
Maturity of certificates of deposit, description | Certificates of deposit at December 31, 2019 had maturity dates of one year or less. | |
Liabilities, fair value | $ 0 | $ 0 |
Held to maturity amortized cost | 0 | 111,692,000 |
Held to maturity fair value | $ 0 | $ 111,692,000 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments - Schedule of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Certificates of deposit due in one year or less, Amortized Cost | $ 111,692 | |
Held to maturity amortized cost | $ 0 | 111,692 |
Certificates of deposit due in one year or less, Estimated Fair Value | 111,692 | |
Held to maturity fair value | $ 0 | $ 111,692 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 52,617 | $ 46,105 |
Less accumulated depreciation and amortization | (25,341) | (18,155) |
Property and equipment, net | 27,276 | 27,950 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 8,057 | 7,923 |
Capitalized Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 181 | 181 |
Capitalized Website Development | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 15,451 | 11,083 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 7,314 | 6,809 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 20,492 | 19,507 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,072 | 524 |
Finance Lease Right-of-use Assets | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 50 | $ 78 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property Plant And Equipment [Line Items] | ||||
Depreciation | $ 1,937 | $ 1,951 | $ 7,367 | $ 5,173 |
Capitalized Website Development | ||||
Property Plant And Equipment [Line Items] | ||||
Increase (decrease) in property and equipment | $ 4,368 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Changes in Carrying Value of Goodwill (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($) | ||
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Balance at December 31, 2019 | $ 15,207 | |
Autolist acquisition | 12,477 | [1] |
Foreign currency translation adjustment | 673 | |
Balance at September 30, 2020 | $ 28,357 | |
[1] | See Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report. |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) | Jan. 16, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Goodwill [Line Items] | |||||
Impairment of goodwill as a result of COVID-19 | $ 0 | ||||
Amortization expense of intangible assets | $ 495,000 | $ 167,000 | 1,412,000 | $ 486,000 | |
Impairment of intangible assets, finite-lived as a result of COVID-19 | $ 0 | ||||
PistonHeads | Brand | |||||
Goodwill [Line Items] | |||||
Estimated useful life | 11 years | ||||
PistonHeads | Customer Relationships | |||||
Goodwill [Line Items] | |||||
Estimated useful life | 3 years | ||||
Autolist | Brand | |||||
Goodwill [Line Items] | |||||
Estimated useful life | 9 years | 9 years | |||
Autolist | Customer Relationships | |||||
Goodwill [Line Items] | |||||
Estimated useful life | 3 years | 3 years | |||
Autolist | Developed Technology | |||||
Goodwill [Line Items] | |||||
Estimated useful life | 3 years | 3 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Summary of Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 12,323 | $ 4,569 |
Accumulated Amortization | 2,061 | 649 |
Net Carrying Amount | $ 10,262 | $ 3,920 |
Brand | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 8 years 8 months 12 days | 10 years |
Gross Carrying Amount | $ 9,257 | $ 3,524 |
Accumulated Amortization | 995 | 313 |
Net Carrying Amount | $ 8,262 | $ 3,211 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 1 year 9 months 18 days | 2 years |
Gross Carrying Amount | $ 1,866 | $ 1,045 |
Accumulated Amortization | 782 | 336 |
Net Carrying Amount | $ 1,084 | $ 709 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 2 years 3 months 18 days | |
Gross Carrying Amount | $ 1,200 | |
Accumulated Amortization | 284 | |
Net Carrying Amount | $ 916 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Summary of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Remainder of 2020 | $ 484 | |
2021 | 1,938 | |
2022 | 1,704 | |
2023 | 971 | |
2024 | 953 | |
2025 | 953 | |
Thereafter | 3,259 | |
Net Carrying Amount | $ 10,262 | $ 3,920 |
Accrued Expenses, Accrued Inc_3
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities - Schedule of Accrued Expenses, Accrued Income Taxes and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities Current [Abstract] | ||
Accrued bonus | $ 8,841 | $ 8,637 |
Accrued commissions | 2,824 | 3,153 |
Other accrued expenses, accrued income taxes and other current liabilities | 6,213 | 6,472 |
Total | $ 17,878 | $ 18,262 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) - Expense Reduction Plan - USD ($) | Apr. 13, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 |
Restructuring Cost And Reserve [Line Items] | ||||
Workforce reduction, percent | 13.00% | |||
Employee Severance and Related Benefits Expense | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring and related charges | $ 0 | $ 3,248,000 | $ 3,248,000 | |
Employee Severance and Related Benefits Expense | Sales and Marketing | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring and related charges | 2,160,000 | |||
Employee Severance and Related Benefits Expense | Product, Technology, and Development | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring and related charges | 737,000 | |||
Employee Severance and Related Benefits Expense | Cost of Revenue | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring and related charges | 207,000 | |||
Employee Severance and Related Benefits Expense | General and Administrative | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring and related charges | 144,000 | |||
Employee Severance and Related Benefits Expense | Stock-Based Compensation Expense | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring and related charges | 667,000 | |||
International | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Write-off of capitalized website development costs and deferred contract costs | $ 1,019,000 | |||
Write-off of capitalized website development costs | 0 | 844,000 | ||
International | Sales and Marketing | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Write-off of deferred contract costs | 175,000 | |||
International | Cost of Revenue | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Write-off of capitalized website development costs | 844,000 | |||
International | Employee Severance and Related Benefits Expense | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring and related charges | $ 0 | $ 756,000 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Accrual Activity for Employee Severance and Related Benefits Expense (Details) - Expense Reduction Plan - Employee Severance and Related Benefits Expense - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | |
Restructuring Cost And Reserve [Line Items] | |||
Charges | $ 0 | $ 3,248 | $ 3,248 |
Cash disbursements | (2,581) | ||
Noncash settlements | $ (667) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Sep. 30, 2020USD ($) | Jun. 12, 2020ft² | Jan. 16, 2020ft² | Dec. 31, 2019USD ($) |
Commitments And Contingencies [Line Items] | ||||
Restricted cash | $ | $ 10,877 | $ 10,803 | ||
Boston, Massachusetts at 1001 Boylston St | ||||
Commitments And Contingencies [Line Items] | ||||
Operating lease, office space | 225,428 | |||
San Francisco, California at 332 Pine St | ||||
Commitments And Contingencies [Line Items] | ||||
Operating lease, office space | 6,345 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 11,030 | $ 8,761 | $ 34,634 | $ 25,390 |
Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 35 | 17 | 130 | |
Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 11,030 | $ 8,726 | $ 34,617 | $ 25,260 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Allocation of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 11,030 | $ 8,761 | $ 34,634 | $ 25,390 |
Cost of Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 57 | 92 | 241 | 268 |
Sales and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 2,450 | 2,520 | 8,206 | 7,392 |
Product, Technology, and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 5,140 | 3,938 | 15,861 | 11,118 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 3,383 | $ 2,211 | $ 10,326 | $ 6,612 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Capitalized website development and internal-use software costs excluded from stock-based compensation expense | $ 656 | $ 324 | $ 1,323 | $ 950 |
Total payments for employees' tax obligations to taxing authorities due to net share settlements and for option exercise costs | $ 2,922 | $ 4,192 | $ 8,708 | $ 12,783 |
Class A Common Stock | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Employee tax withholding requirements and option costs due to net share settlement | 111,370 | 120,943 | 337,313 | 345,114 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020shares | Sep. 30, 2019shares | Sep. 30, 2020Voteshares | Sep. 30, 2019shares | |
Earnings Per Share Basic [Line Items] | ||||
Conversion of stock, description | Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including on either the death or voluntary termination of the Company’s Chief Executive Officer. | |||
Undistributed earnings ratio used to calculate allocation to class of stock | 100.00% | |||
Class A Common Stock | ||||
Earnings Per Share Basic [Line Items] | ||||
Right to voting | one vote per share | |||
Number of votes entitled to stockholders per share | Vote | 1 | |||
Conversion of stock | shares | 898,655 | 200,000 | 1,238,144 | 200,000 |
Class B Common Stock | ||||
Earnings Per Share Basic [Line Items] | ||||
Right to voting | ten votes per share | |||
Number of votes entitled to stockholders per share | Vote | 10 | |||
Class of share converted to another class | one share of Class A common stock | |||
Conversion of stock | shares | 1 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||||||
Net income | $ 32,563 | $ 7,131 | $ 12,696 | $ 10,384 | $ 6,007 | $ 12,584 | $ 52,390 | $ 28,975 |
Denominator: | ||||||||
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic | 113,027,995 | 111,662,949 | 112,707,003 | 111,257,271 | ||||
Dilutive effect of share equivalents resulting from stock options | 632,581 | 1,052,758 | 701,176 | 1,232,754 | ||||
Dilutive effect of share equivalents resulting from unvested restricted stock units | 306,287 | 649,068 | 324,437 | 899,670 | ||||
Weighted-average number of shares of common stock used in computing net income per share — diluted | 113,966,863 | 113,364,775 | 113,732,616 | 113,389,695 | ||||
Net income per share attributable to common stockholders: | ||||||||
Basic | $ 0.29 | $ 0.09 | $ 0.46 | $ 0.26 | ||||
Diluted | $ 0.29 | $ 0.09 | $ 0.46 | $ 0.26 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restricted Stock Units Outstanding | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding | 2,577,713 | 1,421,473 | 2,893,491 | 1,191,286 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Jul. 20, 2020 | Mar. 27, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax Disclosure [Abstract] | ||||||
Income tax provision (benefit) | $ 11,209 | $ 330 | $ 13,312 | $ (4,783) | ||
Effective income tax rate | 25.60% | 3.10% | 20.30% | (19.80%) | ||
Statutory tax rate | 21.00% | 21.00% | 21.00% | 21.00% | ||
Income tax refund received on carryback of net operating loss | $ 3,863 | |||||
Reduction in gross net operating loss current | 18,723 | |||||
Increase in deferred federal research & development credit | $ 2,645 | |||||
Limitation on net operating loss to offset taxable income | 80.00% | |||||
Minimum foreign income tax rate on foreign earnings, percent | 90.00% |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)Segment | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | Segment | 2 | |||
Assets | $ 460,551,000 | $ 460,551,000 | $ 393,623,000 | |
Goodwill | 28,357,000 | 28,357,000 | 15,207,000 | |
Intangible assets | 10,262,000 | 10,262,000 | 3,920,000 | |
International | ||||
Segment Reporting Information [Line Items] | ||||
Assets | 31,627,000 | 31,627,000 | 32,528,000 | |
Goodwill | 15,880,000 | 15,880,000 | 15,207,000 | |
Intangible assets | 3,577,000 | 3,577,000 | $ 3,920,000 | |
Expense Reduction Plan | International | ||||
Segment Reporting Information [Line Items] | ||||
Write-off of capitalized website development costs or deferred contract costs | 0 | |||
Expense Reduction Plan | Employee Severance and Related Benefits Expense | ||||
Segment Reporting Information [Line Items] | ||||
Employee severance and related benefits expense | 0 | $ 3,248,000 | 3,248,000 | |
Expense Reduction Plan | Employee Severance and Related Benefits Expense | International | ||||
Segment Reporting Information [Line Items] | ||||
Employee severance and related benefits expense | 0 | 756,000 | ||
Expense Reduction Plan | Employee Severance and Related Benefits Expense | United States | ||||
Segment Reporting Information [Line Items] | ||||
Employee severance and related benefits expense | $ 0 | $ 2,492,000 |
Segment and Geographic Inform_4
Segment and Geographic Information - Summary of Operations by Segment and Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment revenue: | ||||
Revenue | $ 147,472 | $ 150,462 | $ 399,898 | $ 430,763 |
Segment income (loss) from operations: | ||||
Total income from operations | 43,567 | 9,704 | 64,295 | 20,687 |
United States | ||||
Segment revenue: | ||||
Revenue | 138,412 | 141,637 | 376,164 | 407,050 |
Segment income (loss) from operations: | ||||
Total income from operations | 46,462 | 19,956 | 82,061 | 51,456 |
International | ||||
Segment revenue: | ||||
Revenue | 9,060 | 8,825 | 23,734 | 23,713 |
Segment income (loss) from operations: | ||||
Total income from operations | $ (2,895) | $ (10,252) | $ (17,766) | $ (30,769) |