Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Trading Symbol | CARS | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Cars.com Inc. | |
Entity Central Index Key | 0001683606 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-37869 | |
Entity Tax Identification Number | 81-3693660 | |
Entity Address, Address Line One | 300 S. Riverside Plaza | |
Entity Address, Address Line Two | Suite 1000 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | 312 | |
Local Phone Number | 601-5000 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock Shares Outstanding | 66,610,408 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 31,920 | $ 39,069 |
Accounts receivable, net | 106,966 | 98,893 |
Prepaid expenses | 10,539 | 7,810 |
Other current assets | 5,093 | 1,665 |
Total current assets | 154,518 | 147,437 |
Property and equipment, net | 45,403 | 43,005 |
Goodwill | 102,477 | 26,227 |
Intangible assets, net | 726,247 | 769,424 |
Investments and other assets, net | 21,523 | 21,112 |
Total assets | 1,050,168 | 1,007,205 |
Current liabilities: | ||
Accounts payable | 18,622 | 15,420 |
Accrued compensation | 15,727 | 23,612 |
Current portion of long-term debt | 12,829 | 8,941 |
Other accrued liabilities | 59,051 | 46,317 |
Total current liabilities | 106,229 | 94,290 |
Noncurrent liabilities: | ||
Long-term debt, net | 482,740 | 457,383 |
Other noncurrent liabilities | 84,672 | 57,512 |
Total noncurrent liabilities | 567,412 | 514,895 |
Total liabilities | 673,641 | 609,185 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred Stock at par, $0.01 par value; 5,000 shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 0 | 0 |
Common Stock at par, $0.01 par value; 300,000 shares authorized; 66,850 and 69,170 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 668 | 692 |
Additional paid-in capital | 1,515,014 | 1,544,712 |
Accumulated deficit | (1,138,438) | (1,145,382) |
Accumulated other comprehensive loss | (717) | (2,002) |
Total stockholders' equity | 376,527 | 398,020 |
Total liabilities and stockholders' equity | $ 1,050,168 | $ 1,007,205 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 66,850,000 | 69,170,000 |
Common stock, shares outstanding | 66,850,000 | 69,170,000 |
Consolidated Statements of (Los
Consolidated Statements of (Loss) Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 164,595 | $ 156,553 | $ 485,675 | $ 465,378 |
Operating expenses: | ||||
Cost of revenue and operations | 28,828 | 28,928 | 86,084 | 84,978 |
Product and technology | 21,425 | 20,132 | 65,849 | 56,326 |
Marketing and sales | 53,615 | 51,948 | 165,364 | 156,468 |
General and administrative | 17,694 | 17,919 | 51,465 | 46,800 |
Depreciation and amortization | 23,134 | 25,552 | 70,688 | 76,530 |
Total operating expenses | 144,696 | 144,479 | 439,450 | 421,102 |
Operating income | 19,899 | 12,074 | 46,225 | 44,276 |
Nonoperating expense: | ||||
Interest expense, net | (8,501) | (9,522) | (26,878) | (29,362) |
Other (expense) income, net | (13,387) | 19 | (13,233) | 18 |
Total nonoperating expense, net | (21,888) | (9,503) | (40,111) | (29,344) |
(Loss) income before income taxes | (1,989) | 2,571 | 6,114 | 14,932 |
Income tax expense (benefit) | 952 | 140 | (830) | 1,257 |
Net (loss) income | $ (2,941) | $ 2,431 | $ 6,944 | $ 13,675 |
Weighted-average common shares outstanding: | ||||
Basic | 67,680 | 69,067 | 68,775 | 68,576 |
Diluted | 67,680 | 70,945 | 70,023 | 71,065 |
(Loss) earnings per share: | ||||
Basic | $ (0.04) | $ 0.04 | $ 0.10 | $ 0.20 |
Diluted | $ (0.04) | $ 0.03 | $ 0.10 | $ 0.19 |
Dealer | ||||
Revenue: | ||||
Total revenue | $ 145,395 | $ 139,321 | $ 429,798 | $ 409,145 |
OEM and National | ||||
Revenue: | ||||
Total revenue | 14,909 | 15,273 | 44,227 | 49,671 |
Other | ||||
Revenue: | ||||
Total revenue | $ 4,291 | $ 1,959 | $ 11,650 | $ 6,562 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (2,941) | $ 2,431 | $ 6,944 | $ 13,675 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustments | (717) | 0 | (717) | 0 |
Reclassification of accumulated other comprehensive loss on interest rate swap into Net (loss) income | 0 | 1,202 | 2,002 | 3,603 |
Total other comprehensive (loss) income | (717) | 1,202 | 1,285 | 3,603 |
Comprehensive (loss) income | $ (3,658) | $ 3,633 | $ 8,229 | $ 17,278 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2020 | $ 368,190 | $ 674 | $ 1,530,493 | $ (1,156,173) | $ (6,804) |
Balance, Shares at Dec. 31, 2020 | 67,387 | ||||
Net (loss) income | 5,278 | 5,278 | |||
Other comprehensive income (loss), net of tax | 1,200 | 1,200 | |||
Shares issued in connection with stock-based compensation plans, net | (5,630) | $ 11 | (5,641) | ||
Shares issued in connection with stock-based compensation plans, net, Shares | 1,144 | ||||
Stock-based compensation | 4,978 | 4,978 | |||
Balance at Mar. 31, 2021 | 374,016 | $ 685 | 1,529,830 | (1,150,895) | (5,604) |
Balance, Shares at Mar. 31, 2021 | 68,531 | ||||
Balance at Dec. 31, 2020 | 368,190 | $ 674 | 1,530,493 | (1,156,173) | (6,804) |
Balance, Shares at Dec. 31, 2020 | 67,387 | ||||
Net (loss) income | 13,675 | ||||
Balance at Sep. 30, 2021 | 394,574 | $ 690 | 1,539,583 | (1,142,498) | (3,201) |
Balance, Shares at Sep. 30, 2021 | 69,025 | ||||
Balance at Mar. 31, 2021 | 374,016 | $ 685 | 1,529,830 | (1,150,895) | (5,604) |
Balance, Shares at Mar. 31, 2021 | 68,531 | ||||
Net (loss) income | 5,966 | 5,966 | |||
Other comprehensive income (loss), net of tax | $ 1,201 | 1,201 | |||
Shares issued in connection with stock-based compensation plans, net | $ 5 | (1,424) | |||
Shares issued in connection with stock-based compensation plans, net, Shares | (1,419) | 433 | |||
Stock-based compensation | $ 5,692 | 5,692 | |||
Balance at Jun. 30, 2021 | 385,456 | $ 690 | 1,534,098 | (1,144,929) | (4,403) |
Balance, Shares at Jun. 30, 2021 | 68,964 | ||||
Net (loss) income | 2,431 | 2,431 | |||
Other comprehensive income (loss), net of tax | $ 1,202 | 1,202 | |||
Shares issued in connection with stock-based compensation plans, net | (1) | ||||
Shares issued in connection with stock-based compensation plans, net, Shares | (1) | 61 | |||
Stock-based compensation | $ 5,486 | 5,486 | |||
Balance at Sep. 30, 2021 | 394,574 | $ 690 | 1,539,583 | (1,142,498) | (3,201) |
Balance, Shares at Sep. 30, 2021 | 69,025 | ||||
Balance at Dec. 31, 2021 | 398,020 | $ 692 | 1,544,712 | (1,145,382) | (2,002) |
Balance, Shares at Dec. 31, 2021 | 69,170 | ||||
Net (loss) income | 4,340 | 4,340 | |||
Other comprehensive income (loss), net of tax | 1,202 | 1,202 | |||
Repurchases of common stock(shares) | (338) | ||||
Repurchases of common stock (value) | (5,000) | $ (3) | (4,997) | ||
Shares issued in connection with stock-based compensation plans, net | (7,696) | $ 9 | (7,705) | ||
Shares issued in connection with stock-based compensation plans, net, Shares | 971 | ||||
Stock-based compensation | 5,221 | 5,221 | |||
Balance at Mar. 31, 2022 | 396,087 | $ 698 | 1,537,231 | (1,141,042) | (800) |
Balance, Shares at Mar. 31, 2022 | 69,803 | ||||
Balance at Dec. 31, 2021 | 398,020 | $ 692 | 1,544,712 | (1,145,382) | (2,002) |
Balance, Shares at Dec. 31, 2021 | 69,170 | ||||
Net (loss) income | 6,944 | ||||
Balance at Sep. 30, 2022 | 376,527 | $ 668 | 1,515,014 | (1,138,438) | (717) |
Balance, Shares at Sep. 30, 2022 | 66,850 | ||||
Balance at Mar. 31, 2022 | 396,087 | $ 698 | 1,537,231 | (1,141,042) | (800) |
Balance, Shares at Mar. 31, 2022 | 69,803 | ||||
Net (loss) income | 5,545 | 5,545 | |||
Other comprehensive income (loss), net of tax | 800 | 800 | |||
Repurchases of common stock(shares) | (1,717) | ||||
Repurchases of common stock (value) | $ (18,309) | $ (17) | (18,292) | ||
Shares issued in connection with stock-based compensation plans, net | $ 1 | 857 | |||
Shares issued in connection with stock-based compensation plans, net, Shares | 858 | 158 | |||
Stock-based compensation | $ 6,407 | 6,407 | |||
Balance at Jun. 30, 2022 | 391,388 | $ 682 | 1,526,203 | (1,135,497) | |
Balance, Shares at Jun. 30, 2022 | 68,244 | ||||
Net (loss) income | (2,941) | (2,941) | |||
Other comprehensive income (loss), net of tax | (717) | (717) | |||
Repurchases of common stock(shares) | (1,433) | ||||
Repurchases of common stock (value) | (16,678) | $ (14) | (16,664) | ||
Shares issued in connection with stock-based compensation plans, net, Shares | 39 | ||||
Stock-based compensation | 5,475 | 5,475 | |||
Balance at Sep. 30, 2022 | $ 376,527 | $ 668 | $ 1,515,014 | $ (1,138,438) | $ (717) |
Balance, Shares at Sep. 30, 2022 | 66,850 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net (loss) income | $ 6,944 | $ 13,675 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation | 11,833 | 12,193 |
Amortization of intangible assets | 58,855 | 64,337 |
Amortization of Accumulated other comprehensive loss on interest rate swap | 2,362 | 4,252 |
Changes in fair value of contingent consideration | 13,360 | 0 |
Stock-based compensation | 17,103 | 16,156 |
Deferred income taxes | 676 | (659) |
Provision for doubtful accounts | 1,047 | 350 |
Amortization of debt issuance costs | 2,440 | 2,513 |
Amortization of deferred revenue related to Accu-Trade Acquisition | (3,092) | 0 |
Other, net | 279 | 722 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (7,532) | (5,933) |
Prepaid expenses and other assets | (7,279) | 6,911 |
Accounts payable | 2,882 | (796) |
Accrued compensation | (7,885) | (367) |
Other liabilities | (702) | 2,872 |
Net cash provided by operating activities | 91,291 | 116,226 |
Cash flows from investing activities: | ||
Payments for acquisitions, net of cash acquired | (64,770) | 0 |
Purchase of property and equipment | (14,399) | (17,879) |
Net cash used in investing activities | (79,169) | (17,879) |
Cash flows from financing activities: | ||
Proceeds from Revolving Loan borrowings | 45,000 | 0 |
Payments of long-term debt | (17,500) | (107,500) |
Payments for stock-based compensation plans, net | (6,838) | (7,050) |
Repurchases of common stock | (39,933) | 0 |
Payments of debt issuance costs and other fees | 0 | (9) |
Net cash used in financing activities | (19,271) | (114,559) |
Net decrease in cash and cash equivalents | (7,149) | (16,212) |
Cash and cash equivalents at beginning of period | 39,069 | 67,719 |
Cash and cash equivalents at end of period | 31,920 | 51,507 |
Supplemental cash flow information: | ||
Cash paid (received) for income taxes | 741 | (8,392) |
Cash paid for interest and swap | $ 19,041 | $ 22,687 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | NOTE 1. Descriptio n of Business and Summary of Significant Accounting Policies Description of Business. Cars.com Inc. (the “Company” or “CARS”) is a leading automotive marketplace platform that provides a robust set of digital solutions that connect car shoppers with sellers. The Company empowers shoppers with the data, resources and digital tools needed to make informed buying decisions and seamlessly connect with automotive retailers. In a rapidly changing market, CARS enables dealerships and automotive manufacturers (“OEMs”), with innovative technical solutions and data-driven intelligence, to better reach and influence ready-to-buy shoppers, increase inventory turn and gain market share. In addition to Cars.com, the Company’s brands include Dealer Inspire®, a website and digital solutions provider enabling dealerships to be more efficient through connected digital experiences; FUEL, an advertising solution providing dealers and OEMs the benefit of leveraging targeted digital video and display marketing to Cars.com’s audience of in-market car shoppers; DealerRater®, a leading car dealer review and reputation management technology solution; CreditIQ, digital financing technology and Accu-Trade, vehicle valuation and appraisal technology. The Company's portfolio of brands also includes Auto.com, PickupTrucks.com and NewCars.com®. Basis of Presentation . These accompanying unaudited interim Consolidated Financial Statements (“Consolidated Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021, which are included in the Company's Annual Report on Form 10-K as filed with the SEC on February 25, 2022 (the “December 31, 2021 Financial Statements”). The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in the December 31, 2021 Financial Statements. In the opinion of management, the Consolidated Financial Statements contain all adjustments (consisting of a normal, recurring nature) necessary to present fairly the Company's financial position, results of operations, cash flows and changes in stockholders' equity as of the dates and for the periods indicated. The unaudited results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022. Use of Estimates. The preparation of the accompanying Consolidated Financial Statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Principles of Consolidation . The accompanying Consolidated Financial Statements include the accounts of Cars.com Inc. and its 100 % owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation. Correction of Certain Amounts Relating to Previously Issued Financial Statements. During the first quarter of 2022, the Company identified a $ 30.8 million overstatement of the valuation allowance recorded against deferred tax assets that originated in 2020. In addition, t he Company adjusted 2020 to reflect an immaterial income tax adjustment related to this same period. The Company has concluded that these items are not material to the previously issued Consolidated Financial Statements and has therefore corrected these prior period amounts as presented in the Consolidated Financial Statements for the nine months ended September 30, 2022. The impact of correcting these items on the related financial statement line items is as follows (in thousands): Consolidated Balance Sheet As of December 31, 2021 Financial statement line item As reported Adjustment As adjusted Deferred tax liability $ 31,086 $ ( 31,086 ) $ — Total noncurrent liabilities 545,981 ( 31,086 ) 514,895 Total liabilities 640,271 ( 31,086 ) 609,185 Consolidated Balance Sheet and Statement of Stockholders' Equity As of December 31, 2021 Financial statement line item As reported Adjustment As adjusted Accumulated deficit $ ( 1,176,468 ) $ 31,086 $ ( 1,145,382 ) Total stockholders' equity 366,934 31,086 398,020 Consolidated Statement of Stockholders' Equity Nine Months Ended September 30, 2021 Financial statement line item As reported Adjustment As adjusted Accumulated deficit balance at December 31, 2020 $ ( 1,184,187 ) $ 28,014 $ ( 1,156,173 ) Total stockholders' equity balance at December 31, 2020 340,176 28,014 368,190 Accumulated deficit balance at March 31, 2021 ( 1,178,909 ) 28,014 ( 1,150,895 ) Total stockholders' equity balance at March 31, 2021 346,002 28,014 374,016 Accumulated deficit balance at June 30, 2021 ( 1,172,943 ) 28,014 ( 1,144,929 ) Total stockholders' equity balance at June 30, 2021 357,442 28,014 385,456 Accumulated deficit balance at September 30, 2021 ( 1,170,512 ) 28,014 ( 1,142,498 ) Total stockholders' equity balance at September 30, 2021 366,560 28,014 394,574 These adjustments had no impact to Net cash provided by operating activities, Net cash used in investing activities or Net cash used in financing activities on the Consolidated Statements of Cash Flows. In addition, these adjustments had no impact to the Consolidated Statements of (Loss) Income and Earnings per share for the three and nine months ended September 30, 2021. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 2. Revenue Revenue Summary . In the table below (in thousands), revenue is disaggregated by major products and services. The Company only has one reportable segment; therefore, further disaggregation is not applicable at this time. Three Months Ended September 30, Nine Months Ended September 30, Major products and services 2022 2021 2022 2021 Subscription advertising and digital solutions $ 135,433 $ 131,293 $ 403,112 $ 385,472 Display advertising 22,699 20,766 64,607 64,045 Pay per lead 2,381 2,739 6,927 9,779 Other 4,082 1,755 11,029 6,082 Total revenue $ 164,595 $ 156,553 $ 485,675 $ 465,378 |
Goodwill, Indefinite-lived Inta
Goodwill, Indefinite-lived Intangible Asset and Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Goodwill, Indefinite-lived Intangible Asset and Business Combinations | NOTE 3. Goodwill, Indefinite-lived Intangible Asset and Business Combinations The changes in the carrying amount of goodwill and indefinite-lived intangible asset are as follows (in thousands): December 31, 2021 Additions Foreign Currency Translation September 30, 2022 Goodwill $ 26,227 $ 76,967 $ ( 717 ) $ 102,477 Indefinite-lived intangible asset 390,020 — — 390,020 Business Combinations. The below transactions were accounted for as business combinations. Accu-Trade Acquisition. On March 1, 2022, the Company acquired certain of the assets and assumed certain liabilities of Accu-Trade, LLC; Accu-Trade Canada, LLC; Galves Market Data; and Headstart Logistics, LLC d/b/a/ MADE Logistics (collectively, “Accu-Trade”), which provides dealers with VIN-specific vehicle valuation and appraisal data, instant offer capabilities and logistics technology (the “Accu-Trade Acquisition”). The Company expensed as incurred total acquisition costs of $ 2.1 million, of which $ 1.1 million were recorded during the nine months ended September 30, 2022. These cos ts were recorded in General and administrative expenses in the Consolidated Statements of (Loss) Income. Preliminary Purchase Price Allocation. The preliminary fair values assigned to the tangible and intangible assets acquired and liabilities assumed were determined based on management’s estimates and assumptions, as well as other information compiled by management, including third-party valuations that utilize customary valuation procedures and techniques, such as the multi-period excess earnings and the relief of royalty methods. These preliminary fair values are subject to change within the one-year measurement period. The Accu-Trade Acquisition purchase price allocation is as follows (in thousands): Preliminary Cash consideration $ 64,770 Other consideration (1) 5,300 Contingent consideration (2) 23,936 Total purchase consideration $ 94,006 Assets acquired (3) $ 1,595 Identified intangible assets (4) 15,679 Total assets acquired 17,274 Total liabilities assumed (5) ( 235 ) Net identifiable assets 17,039 Goodwill 76,967 Total purchase consideration $ 94,006 (1) In connection with the Accu-Trade Acquisition, the Company entered into an agreement to provide one of the former owners with a one-year license to a certain product. The preliminary fair value of the license was determined to be $ 6.5 million, of which the Company received $ 1.2 million in cash upon the close of the Accu-Trade Acquisition. The $ 5.3 million difference between the fair value of $ 6.5 million and the $ 1.2 million in cash was recorded as non-cash consideration and the $ 6.5 million license fee was recorded in Other accrued liabilities as a contract liability on the Consolidated Balance Sheets and is being amortized into Other revenue on the Consolidated Statements of (Loss) Income over the one-year contract term. The current period revenue related to the non-cash consideration of $ 5.3 million is a non-cash reconciling item titled Amortization of deferred revenue related to Accu-Trade Acquisition on the Consolidated Statements of Cash Flows. (2) As part of the Accu-Trade Acquisition, the C ompany may be required to pay additional consideration to the former owners based on achievement of certain financial targets. The Company has the option to pay consideration in cash or stock, which would result in a variable number of shares being issued. The amount to be paid will be determined by the acquired business’ future performance to be attained over a three-year performance period; based on certain tiered performance metrics the maximum amount to be paid is $ 63.0 million, with additional upside for performance that exceeds the tiered performance metrics. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation based on the following significant inputs: volatility, disco unt rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for Accu-Trade within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the Accu-Trade contingent consideration, see Note 4 (Fair Value Measurements). (3) Assets acquire d primarily consist of accounts receivable. (4) Preliminary information regarding the identifiable intangible assets acquired is as follows: Acquisition-Date Amortization Period Acquired software $ 12,926 5 Trade name 1,446 10 Customer relationships 1,307 7 Total $ 15,679 (5) Total liabilities assumed primarily consist of accounts payable. Goodwill. In connection with the Accu-Trade Acquisition, the Company recorded goodwill in the amount of $ 77.0 million, which is primarily attributable to sales growth from existing and future technology, product offerings, customers and the value of the acquired assembled workforce. All of the goodwill is considered deductible for income tax purposes. CreditIQ Acquisition. On November 5, 2021, the Company acquired all of the outstanding stock of CreditIQ, Inc. (the “CIQ Acquisition”), an automotive fintech platform that provides instant online loan screening and approvals to facilitate online car buying. Through the CIQ Acquisition, the Company will provide dealers and car shoppers with access to advanced digital financing technology across the CARS platform. The Company expensed as incurred total acquisition costs of $ 1.4 million, of which $ 0.2 million were recorded during the nine months ended September 30, 2022. These costs were recorded in General and administrative in the Consolidated Statements of (Loss) Income. In connection with the CIQ Acquisition, CreditIQ’s unvested equity awards were cash-settled for a total of $ 9.6 million. The fair value of these awards was based on the price paid per common share to the owners of the acquired business and recognized immediately after the CIQ Acquisition in November 2021 as compensation expense in the Company’s Consolidated Statements of (Loss) Income. Preliminary Purchase Price Allocation. The fair values assigned to the tangible and intangible assets acquired and liabilities assumed were determined based on management’s estimates and assumptions, as well as other information compiled by management, including third-party valuations that utilize customary valuation procedures and techniques, such as the multi-period excess earnings and the relief of royalty methods. The preliminary fair values of all assets acquired and liabilities assumed are subject to change within the one-year measurement period. The CIQ Acquisition purchase price allocation is as follows (in thousands): Preliminary Cash consideration (1) $ 29,965 Contingent consideration (2) 23,805 Cash settlement of CIQ Acquisition's unvested equity awards (3) ( 9,626 ) Total purchase consideration $ 44,144 Assets acquired (4) $ 193 Identified intangible assets (5) 19,900 Total assets acquired 20,093 Total liabilities assumed (6) ( 2,176 ) Net identifiable assets 17,917 Goodwill 26,227 Total purchase consideration $ 44,144 (1) A reconciliation of cash consideration to Payments for the CIQ Acquisition, net of cash acquired is as follows (in thousands): Cash consideration $ 29,965 Less: Cash settlement of CIQ Acquisition's unvested equity awards (3) ( 9,626 ) Less: Cash acquired ( 81 ) Payments for CIQ Acquisition, net of cash acquired $ 20,258 (2) As part of the CIQ Acquisition, the Company may be required to pay up to an additional $ 50.0 million in cash consideration to the former owners based on two earn-out achievement objectives, including an earnings-related metric and lender market share. The actual amount to be paid will be based on the acquired business’ future performance to be attained over a three-year performance period with a mutually agreed-upon option for a fourth year. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation or a scenario-based method based on the following significant inputs: volatility, discount rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for CreditIQ within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the CreditIQ contingent consideration, see Note 4 (Fair Value Measurements). (3) In connection with the CIQ Acquisition, CreditIQ’s unvested equity awards were cash-settled. The fair value of these awards was $ 9.6 million and was based on the price paid per common share to the owners of the acquired business and recognized immediately after the CIQ Acquisition in November 2021 as compensation expense in General and administrative expense on the Company’s Consolidated Statements of (Loss) Income. (4) Assets acquired primarily consist of cash and cash equivalents and accounts receivable. (5) Preliminary information regarding the identifiable intangible assets acquired is as follows: Acquisition-Date Amortization Period Trade name $ 900 10 Acquired software 19,000 5 Total $ 19,900 (6) Total liabilities assumed includes accounts payable, deferred income tax liabilities, net and other liabilities. Goodwill. In connection with the CIQ Acquisition, the Company recorded goodwill in the amount of $ 26.2 million, which is primarily attributable to sales growth from existing and future technology, product offerings, customers and the value of the acquired assembled workforce. None of the goodwill is considered deductible for income tax purposes. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 4. Fair Value Measurements The Company's liabilities measured at fair value on a recurring basis consisted of the following (in thousands): Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 61,100 $ — $ — $ 61,100 Total $ 61,100 $ — $ — $ 61,100 Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 23,805 $ — $ — $ 23,805 Total $ 23,805 $ — $ — $ 23,805 The rollforward of the Level 3 contingent consideration from December 31, 2021 is as follows (in thousands): As of Addition Related to Accu-Trade Acquisition Fair Value (1) As of Contingent consideration $ 23,805 $ 23,936 $ 13,359 $ 61,100 (1) Fair value adjustments on contingent considerations are reflected within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information relating to contingent consideration, see Note 3 (Goodwill, Indefinite-lived Intangible Asset and Business Combinations ). |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 5. Debt As of September 30, 2022, the Company was in compliance with the covenants under its debt agreements. Term Loan. As of September 30, 2022, the outstanding principal amount under the Term Loan was $ 70.0 million and the interest rate in effect was 5.7 %. During the nine months ended September 30, 2022, the Company made $ 7.5 million in Term Loan payments. Revolving Loan. As of September 30, 2022, the outstanding borrowings under the Revolving Loan were $ 35.0 million and the interest rate in effect was 5.1 %. As of September 30, 2022, $ 195.0 million was available to borrow under the Revolving Loan. During the nine months ended September 30, 2022, the Company paid down $ 10.0 million on the Revolving Loan. The Company’s borrowings are limited by its Senior Secured Leverage Ratio and Consolidated Interest Coverage Ratio, which are calculated in accordance with our Credit Agreement, and were 0.6x and 5.7x as of September 30, 2022, respectively. Senior Unsecured Notes. In October 2020, the Company issued $ 400.0 million aggregate principal amount of 6.375 % Senior Unsecured Notes due 2028. Interest on the notes is due semi-annually on May 1 and November 1. Fair Value. The Company's debt is classified as Level 2 in the fair value hierarchy and the fair value is measured based on comparable trading prices, ratings, sectors, coupons and maturities of similar instruments. The approximate fair value and related carrying value of the Company's outstanding indebtedness, as of September 30, 2022 and December 31, 2021 were as follows (in millions): September 30, 2022 December 31, 2021 Fair value $ 439.0 $ 502.7 Carrying value 505.0 477.5 |
Interest Rate Swap
Interest Rate Swap | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swap | NOTE 6. Interest Rate Swap The interest rate on borrowings under the Company’s Term Loan and Revolving Loan is floating and, therefore, subject to fluctuations. In order to manage the risk associated with changes in interest rates on its borrowing under the Term Loan and Revolving Loan prior to the October 2020 refinancing, the Company entered into an interest rate swap (the “Swap”) effective December 31, 2018. Under the terms of the Swap, the Company was locked into a fixed rate of interest of 2.96 % plus an applicable margin, as defined in the Company’s Credit Agreement, on a notional amount of $ 300 million until May 31, 2022. Although the Swap was initially designated as a cash flow hedge of interest rate risk, hedge accounting was discontinued in June 2020. The loss on the hedge that was recorded in Accumulated other comprehensive loss at that time was amortized into Interest expense, net in the Consolidated Statements of (Loss) Income ratably over the remaining term of the S wap. The Swap expired on May 31, 2022 and, as such, is no longer recorded on the Consolidated Balance Sheets. As of December 31, 2021, the fair value of the Swap was an unrealized loss of $ 3.5 million, which was recorded in Other accrued liabilities on the Consolidated Balance Sheets. During the nine months ended September 30, 2022 and 2021, $ 2.4 million and $ 4.3 million was reclassified from Accumulated other comprehensive loss and recorded in Interest expense, net, respectively. During the nine months ended September 30, 2022, the Company made payments of $ 3.3 million related to the Swap and $ 0.4 million was reclassified as a tax benefit from Accumulated other comprehensive loss into Income tax expense (benefit) on the Consolidated Statements of (Loss) Income. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7. Commitments and Contingencies From time to time, the Company and its subsidiaries are parties in legal and administrative proceedings involving matters incidental to its business. These matters, whether pending, threatened or unasserted, if decided adversely to the Company or settled, may result in liabilities material to its financial position, results of operations or cash flows. The Company records a liability when it believes that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. The Company evaluates, at least quarterly, developments in its legal matters that could affect the amount of liability that has been previously accrued and makes adjustments as appropriate. Significant judgment is required to determine both the probability and the estimated amount. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 8. Stockholders' Equity In February 2022, the Company's Board of Directors authorized a three-year share repurchase program to acquire up to $ 200 million of the Company's common stock. The Company may repurchase shares from time to time in open market transactions or through privately negotiated transactions in accordance with applicable federal securities laws and other applicable legal requirements, and subject to the Company's blackout periods. The timing and amounts of any purchases under the share repurchase program will be based on market conditions and other factors including price. The repurchase program may be suspended or discontinued at any time and does not obligate the Company to repurchase any dollar amount or particular amount of shares. The Company funds the share repurchase program principally with cash from operations. During the nine months ended September 30, 2022, the Company repurchased and subsequently retired 3.5 million shares for $ 40.0 million at an average price paid per share of $ 11.47 . |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 9. Stock-Based Compensation Restricted Share Units (“RSUs”). RSUs represent the right to receive unrestricted shares of the Company’s common stock at the time of vesting, subject to any restrictions a s specified in the individual holder’s award agreement. RSUs are subject to graded vesting, generally ranging between one and four years and the fair value of the RSUs is equal to the Company ’s common stock price on the date of grant. RSU activity for the nine months ended September 30, 2022 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2021 3,683 $ 10.95 Granted 2,290 14.34 Vested and delivered ( 1,572 ) 10.63 Forfeited ( 783 ) 12.66 Outstanding as of September 30, 2022 (1) 3,618 12.86 (1) Includes 63 RSUs that were vested, but not yet delivered. Performance Share Units (“PSUs”). PSUs represent the right to receive unrestricted shares of the Company’s common stock at the time of vesting. The fair value of the PSUs is equal to the Company’s common stock price on the date of grant. Expense related to PSUs is recognized when the performance conditions are probable of being achieved. The percentage of PSUs that shall vest range from 0 % to 200 % of the number of PSUs granted based on the Company’s future performance related to certain revenue and adjusted earnings before interest, income taxes, depreciation and amortization targets over a three-year performance period. These PSUs are subject to cliff vesting at the end of the respective performance period. PSU activity for the nine months ended September 30, 2022 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2021 142 $ 23.98 Granted 275 15.07 Vested and delivered ( 142 ) 23.98 Forfeited ( 59 ) 15.07 Outstanding as of September 30, 2022 216 15.07 Stock Options. Stock optio ns represent the right to purchase shares of the Company’s common stock at the time of vesting, subject to any restrictions as specified in the individual holder’s award agreement. Stock options are subject to three-year cliff vesting and expire 10 years from the grant date. Stock option activity for the nine months ended September 30, 2022 is as follows (in thousands, except for weighted-average grant date fair value and weighted-average remaining contractual term): Number of Options Weighted-Average Weighted-Average Remaining Contractual Term (in years) Aggregate Outstanding as of December 31, 2021 804 $ 5.27 8.58 $ 5,754 Granted 263 9.39 Vested and delivered — — Forfeited — — Outstanding as of September 30, 2022 1,067 6.28 8.23 3,131 Exercisable as of September 30, 2022 — — — — The fair value of the stock options granted during the nine months ended September 30, 2022 and September 30, 2021 are estimated on the grant date using the Black-Scholes option pricing model, using the following assumptions: 2022 2021 Risk-free interest rate 2.21 % 1.15 % Weighted-average volatility 65.22 % 69.00 % Dividend yield 0 % 0 % Expected years until exercise 6.5 6.5 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 10. Earnings Per Share Basic earnings per share is calculated by dividing Net (loss) income by the weighted-average number of shares of the Company's common stock outstanding. Diluted earnings per share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans, unless the inclusion of such shares would have an anti-dilutive effect. The computation of Earnings per share is as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net (loss) income $ ( 2,941 ) $ 2,431 $ 6,944 $ 13,675 Basic weighted-average common shares outstanding 67,680 69,067 68,775 68,576 Effect of dilutive stock-based compensation awards (1) — 1,878 1,248 2,489 Diluted weighted-average common shares outstanding 67,680 70,945 70,023 71,065 (Loss) earnings per share, basic $ ( 0.04 ) $ 0.04 $ 0.10 $ 0.20 (Loss) earnings per share, diluted ( 0.04 ) 0.03 0.10 0.19 There were 3,581 and 1,369 potential common shares excluded from diluted weighted-average common shares outstanding for the three months ended September 30, 2022 and September 30, 202 1, respectively, and 2,027 and 1,376 potential common shares excluded from diluted weighted-average common shares outstanding for the nine months ended September 30, 2022 and September 30, 2021, respectively, as their inclusion would have had an anti-dilutive effect. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Deferred Tax Asset and Valuation Allowance. The Company has concluded a valuation allowance is required against its deferred tax assets as of September 30, 2022. In reaching this conclusion, in accordance with U.S. GAAP, the Company has evaluated all available evidence, both positive and negative, and determined that the Company’s history of recent losses, primarily due to the goodwill and indefinite-lived intangible asset impairments, was sufficient significant negative evidence to require a valuation allowance. Therefore, the Company has recorded a valuation allowance to reduce its deferred tax assets as of September 30, 2022 to the amount that is more likely than not to be realized in future periods. At each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. Effective Tax Rate. The effective income tax rate, expressed by calculating the income tax expense (benefit) as a percentage of (Loss) income before income tax, was ( 13.6 )% for the nine months ended September 30, 2022, which varied from the statutory federal income tax rate of 21 %, primarily due to the tax benefits realized on stock-based compensation and the impact of uncertain tax positions . (In thousands, except percentages) Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Income tax provision at statutory rate $ ( 417 ) 21.0 % $ 1,284 21.0 % State income taxes, net of federal income tax benefit 523 ( 26.3 ) 1,069 17.5 Stock-based compensation 29 ( 1.5 ) ( 1,182 ) ( 19.3 ) Uncertain tax positions 52 ( 2.6 ) ( 963 ) ( 15.8 ) Valuation allowance 2,482 ( 124.8 ) 35 0.6 Other, net ( 1,717 ) 86.3 ( 1,073 ) ( 17.6 ) Income tax expense (benefit) $ 952 ( 47.9 )% $ ( 830 ) ( 13.6 )% |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation . These accompanying unaudited interim Consolidated Financial Statements (“Consolidated Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021, which are included in the Company's Annual Report on Form 10-K as filed with the SEC on February 25, 2022 (the “December 31, 2021 Financial Statements”). The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in the December 31, 2021 Financial Statements. In the opinion of management, the Consolidated Financial Statements contain all adjustments (consisting of a normal, recurring nature) necessary to present fairly the Company's financial position, results of operations, cash flows and changes in stockholders' equity as of the dates and for the periods indicated. The unaudited results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022. |
Use of Estimates | Use of Estimates. The preparation of the accompanying Consolidated Financial Statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. |
Principles of Consolidation | Principles of Consolidation . The accompanying Consolidated Financial Statements include the accounts of Cars.com Inc. and its 100 % owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Consolidated Financial Statements | The impact of correcting these items on the related financial statement line items is as follows (in thousands): Consolidated Balance Sheet As of December 31, 2021 Financial statement line item As reported Adjustment As adjusted Deferred tax liability $ 31,086 $ ( 31,086 ) $ — Total noncurrent liabilities 545,981 ( 31,086 ) 514,895 Total liabilities 640,271 ( 31,086 ) 609,185 Consolidated Balance Sheet and Statement of Stockholders' Equity As of December 31, 2021 Financial statement line item As reported Adjustment As adjusted Accumulated deficit $ ( 1,176,468 ) $ 31,086 $ ( 1,145,382 ) Total stockholders' equity 366,934 31,086 398,020 Consolidated Statement of Stockholders' Equity Nine Months Ended September 30, 2021 Financial statement line item As reported Adjustment As adjusted Accumulated deficit balance at December 31, 2020 $ ( 1,184,187 ) $ 28,014 $ ( 1,156,173 ) Total stockholders' equity balance at December 31, 2020 340,176 28,014 368,190 Accumulated deficit balance at March 31, 2021 ( 1,178,909 ) 28,014 ( 1,150,895 ) Total stockholders' equity balance at March 31, 2021 346,002 28,014 374,016 Accumulated deficit balance at June 30, 2021 ( 1,172,943 ) 28,014 ( 1,144,929 ) Total stockholders' equity balance at June 30, 2021 357,442 28,014 385,456 Accumulated deficit balance at September 30, 2021 ( 1,170,512 ) 28,014 ( 1,142,498 ) Total stockholders' equity balance at September 30, 2021 366,560 28,014 394,574 These adjustments had no impact to Net cash provided by operating activities, Net cash used in investing activities or Net cash used in financing activities on the Consolidated Statements of Cash Flows. In addition, these adjustments had no impact to the Consolidated Statements of (Loss) Income and Earnings per share for the three and nine months ended September 30, 2021. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Sales Channel and Major Products and Services | Revenue Summary . In the table below (in thousands), revenue is disaggregated by major products and services. The Company only has one reportable segment; therefore, further disaggregation is not applicable at this time. Three Months Ended September 30, Nine Months Ended September 30, Major products and services 2022 2021 2022 2021 Subscription advertising and digital solutions $ 135,433 $ 131,293 $ 403,112 $ 385,472 Display advertising 22,699 20,766 64,607 64,045 Pay per lead 2,381 2,739 6,927 9,779 Other 4,082 1,755 11,029 6,082 Total revenue $ 164,595 $ 156,553 $ 485,675 $ 465,378 |
Goodwill, Indefinite-lived In_2
Goodwill, Indefinite-lived Intangible Asset and Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Schedule of changes in the carrying amount of goodwill and indefinite-lived intangible asset | The changes in the carrying amount of goodwill and indefinite-lived intangible asset are as follows (in thousands): December 31, 2021 Additions Foreign Currency Translation September 30, 2022 Goodwill $ 26,227 $ 76,967 $ ( 717 ) $ 102,477 Indefinite-lived intangible asset 390,020 — — 390,020 |
Schedule of Accu-Trade Acquisition purchase price allocation | The Accu-Trade Acquisition purchase price allocation is as follows (in thousands): Preliminary Cash consideration $ 64,770 Other consideration (1) 5,300 Contingent consideration (2) 23,936 Total purchase consideration $ 94,006 Assets acquired (3) $ 1,595 Identified intangible assets (4) 15,679 Total assets acquired 17,274 Total liabilities assumed (5) ( 235 ) Net identifiable assets 17,039 Goodwill 76,967 Total purchase consideration $ 94,006 (1) In connection with the Accu-Trade Acquisition, the Company entered into an agreement to provide one of the former owners with a one-year license to a certain product. The preliminary fair value of the license was determined to be $ 6.5 million, of which the Company received $ 1.2 million in cash upon the close of the Accu-Trade Acquisition. The $ 5.3 million difference between the fair value of $ 6.5 million and the $ 1.2 million in cash was recorded as non-cash consideration and the $ 6.5 million license fee was recorded in Other accrued liabilities as a contract liability on the Consolidated Balance Sheets and is being amortized into Other revenue on the Consolidated Statements of (Loss) Income over the one-year contract term. The current period revenue related to the non-cash consideration of $ 5.3 million is a non-cash reconciling item titled Amortization of deferred revenue related to Accu-Trade Acquisition on the Consolidated Statements of Cash Flows. (2) As part of the Accu-Trade Acquisition, the C ompany may be required to pay additional consideration to the former owners based on achievement of certain financial targets. The Company has the option to pay consideration in cash or stock, which would result in a variable number of shares being issued. The amount to be paid will be determined by the acquired business’ future performance to be attained over a three-year performance period; based on certain tiered performance metrics the maximum amount to be paid is $ 63.0 million, with additional upside for performance that exceeds the tiered performance metrics. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation based on the following significant inputs: volatility, disco unt rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for Accu-Trade within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the Accu-Trade contingent consideration, see Note 4 (Fair Value Measurements). (3) Assets acquire d primarily consist of accounts receivable. (4) Preliminary information regarding the identifiable intangible assets acquired is as follows: Acquisition-Date Amortization Period Acquired software $ 12,926 5 Trade name 1,446 10 Customer relationships 1,307 7 Total $ 15,679 (5) Total liabilities assumed primarily consist of accounts payable. |
Schedule Of CIQ Acquisition purchase price allocation | The CIQ Acquisition purchase price allocation is as follows (in thousands): Preliminary Cash consideration (1) $ 29,965 Contingent consideration (2) 23,805 Cash settlement of CIQ Acquisition's unvested equity awards (3) ( 9,626 ) Total purchase consideration $ 44,144 Assets acquired (4) $ 193 Identified intangible assets (5) 19,900 Total assets acquired 20,093 Total liabilities assumed (6) ( 2,176 ) Net identifiable assets 17,917 Goodwill 26,227 Total purchase consideration $ 44,144 (1) A reconciliation of cash consideration to Payments for the CIQ Acquisition, net of cash acquired is as follows (in thousands): Cash consideration $ 29,965 Less: Cash settlement of CIQ Acquisition's unvested equity awards (3) ( 9,626 ) Less: Cash acquired ( 81 ) Payments for CIQ Acquisition, net of cash acquired $ 20,258 (2) As part of the CIQ Acquisition, the Company may be required to pay up to an additional $ 50.0 million in cash consideration to the former owners based on two earn-out achievement objectives, including an earnings-related metric and lender market share. The actual amount to be paid will be based on the acquired business’ future performance to be attained over a three-year performance period with a mutually agreed-upon option for a fourth year. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation or a scenario-based method based on the following significant inputs: volatility, discount rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for CreditIQ within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the CreditIQ contingent consideration, see Note 4 (Fair Value Measurements). (3) In connection with the CIQ Acquisition, CreditIQ’s unvested equity awards were cash-settled. The fair value of these awards was $ 9.6 million and was based on the price paid per common share to the owners of the acquired business and recognized immediately after the CIQ Acquisition in November 2021 as compensation expense in General and administrative expense on the Company’s Consolidated Statements of (Loss) Income. (4) Assets acquired primarily consist of cash and cash equivalents and accounts receivable. (5) Preliminary information regarding the identifiable intangible assets acquired is as follows: Acquisition-Date Amortization Period Trade name $ 900 10 Acquired software 19,000 5 Total $ 19,900 (6) Total liabilities assumed includes accounts payable, deferred income tax liabilities, net and other liabilities. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Company's Liabilities Measured at Fair Value on a Recurring Basis | The Company's liabilities measured at fair value on a recurring basis consisted of the following (in thousands): Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 61,100 $ — $ — $ 61,100 Total $ 61,100 $ — $ — $ 61,100 Fair value measurement at reporting date Total as of Level 1 Level 2 Level 3 Contingent consideration $ 23,805 $ — $ — $ 23,805 Total $ 23,805 $ — $ — $ 23,805 |
Schedule Of Contingent Consideration | The rollforward of the Level 3 contingent consideration from December 31, 2021 is as follows (in thousands): As of Addition Related to Accu-Trade Acquisition Fair Value (1) As of Contingent consideration $ 23,805 $ 23,936 $ 13,359 $ 61,100 (1) Fair value adjustments on contingent considerations are reflected within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of approximate fair value and related carrying value of the Company's outstanding indebtedness | The approximate fair value and related carrying value of the Company's outstanding indebtedness, as of September 30, 2022 and December 31, 2021 were as follows (in millions): September 30, 2022 December 31, 2021 Fair value $ 439.0 $ 502.7 Carrying value 505.0 477.5 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of RSU Activity | RSU activity for the nine months ended September 30, 2022 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2021 3,683 $ 10.95 Granted 2,290 14.34 Vested and delivered ( 1,572 ) 10.63 Forfeited ( 783 ) 12.66 Outstanding as of September 30, 2022 (1) 3,618 12.86 |
Summary of PSU Activity | PSU activity for the nine months ended September 30, 2022 is as follows (in thousands, except for weighted-average grant date fair value): Number Weighted-Average Outstanding as of December 31, 2021 142 $ 23.98 Granted 275 15.07 Vested and delivered ( 142 ) 23.98 Forfeited ( 59 ) 15.07 Outstanding as of September 30, 2022 216 15.07 |
Summary of Stock Option Activity | Stock option activity for the nine months ended September 30, 2022 is as follows (in thousands, except for weighted-average grant date fair value and weighted-average remaining contractual term): Number of Options Weighted-Average Weighted-Average Remaining Contractual Term (in years) Aggregate Outstanding as of December 31, 2021 804 $ 5.27 8.58 $ 5,754 Granted 263 9.39 Vested and delivered — — Forfeited — — Outstanding as of September 30, 2022 1,067 6.28 8.23 3,131 Exercisable as of September 30, 2022 — — — — |
Summary of Fair Value of Stock Options Granted are Estimated Using Black Scholes Option Pricing Model | The fair value of the stock options granted during the nine months ended September 30, 2022 and September 30, 2021 are estimated on the grant date using the Black-Scholes option pricing model, using the following assumptions: 2022 2021 Risk-free interest rate 2.21 % 1.15 % Weighted-average volatility 65.22 % 69.00 % Dividend yield 0 % 0 % Expected years until exercise 6.5 6.5 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Earnings (Loss) Per Share | The computation of Earnings per share is as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net (loss) income $ ( 2,941 ) $ 2,431 $ 6,944 $ 13,675 Basic weighted-average common shares outstanding 67,680 69,067 68,775 68,576 Effect of dilutive stock-based compensation awards (1) — 1,878 1,248 2,489 Diluted weighted-average common shares outstanding 67,680 70,945 70,023 71,065 (Loss) earnings per share, basic $ ( 0.04 ) $ 0.04 $ 0.10 $ 0.20 (Loss) earnings per share, diluted ( 0.04 ) 0.03 0.10 0.19 There were 3,581 and 1,369 potential common shares excluded from diluted weighted-average common shares outstanding for the three months ended September 30, 2022 and September 30, 202 1, respectively, and 2,027 and 1,376 potential common shares excluded from diluted weighted-average common shares outstanding for the nine months ended September 30, 2022 and September 30, 2021, respectively, as their inclusion would have had an anti-dilutive effect. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Varied from Statutory Federal Income Tax Rate | The effective income tax rate, expressed by calculating the income tax expense (benefit) as a percentage of (Loss) income before income tax, was ( 13.6 )% for the nine months ended September 30, 2022, which varied from the statutory federal income tax rate of 21 %, primarily due to the tax benefits realized on stock-based compensation and the impact of uncertain tax positions . (In thousands, except percentages) Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Income tax provision at statutory rate $ ( 417 ) 21.0 % $ 1,284 21.0 % State income taxes, net of federal income tax benefit 523 ( 26.3 ) 1,069 17.5 Stock-based compensation 29 ( 1.5 ) ( 1,182 ) ( 19.3 ) Uncertain tax positions 52 ( 2.6 ) ( 963 ) ( 15.8 ) Valuation allowance 2,482 ( 124.8 ) 35 0.6 Other, net ( 1,717 ) 86.3 ( 1,073 ) ( 17.6 ) Income tax expense (benefit) $ 952 ( 47.9 )% $ ( 830 ) ( 13.6 )% |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Mar. 31, 2022 | |
Accounting Policies [Abstract] | ||
Percentage of ownership by the company | 100% | |
Deferred Tax Assets, Valuation Allowance | $ 30.8 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Schedule of Impact of Corrections on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
As reported | ||
Total noncurrent liabilities | $ 567,412 | $ 514,895 |
Total liabilities | $ 673,641 | 609,185 |
Error Correction, Other [Member] | ||
As reported | ||
Deferred tax liability | 31,086 | |
Total noncurrent liabilities | 545,981 | |
Total liabilities | 640,271 | |
Adjustment | ||
Deferred tax liability | (31,086) | |
Total noncurrent liabilities | (31,086) | |
Total liabilities | (31,086) | |
As adjusted | ||
Deferred tax liability | 0 | |
Total noncurrent liabilities | 514,895 | |
Total liabilities | $ 609,185 |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Schedule of Impact of Corrections on Consolidated Balance Sheet and Statement of Stockholders' Equity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
As reported | ||||||||
Accumulated deficit | $ (1,138,438) | $ (1,145,382) | ||||||
Total stockholders' equity | $ 376,527 | $ 391,388 | $ 396,087 | 398,020 | $ 394,574 | $ 385,456 | $ 374,016 | $ 368,190 |
Error Correction, Other [Member] | ||||||||
As reported | ||||||||
Accumulated deficit | (1,176,468) | (1,170,512) | (1,172,943) | (1,178,909) | (1,184,187) | |||
Total stockholders' equity | 366,934 | 366,560 | 357,442 | 346,002 | 340,176 | |||
Adjustment | ||||||||
Accumulated deficit | 31,086 | 28,014 | 28,014 | 28,014 | 28,014 | |||
Total stockholders' equity | 31,086 | 28,014 | 28,014 | 28,014 | 28,014 | |||
As adjusted | ||||||||
Accumulated deficit | (1,145,382) | (1,142,498) | (1,144,929) | (1,150,895) | (1,156,173) | |||
Total stockholders' equity | $ 398,020 | $ 394,574 | $ 385,456 | $ 374,016 | $ 368,190 |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies - Schedule of Impact of Corrections on Statement of Stockholders' Equity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
As reported | ||||||||
Accumulated deficit | $ (1,138,438) | $ (1,145,382) | ||||||
Total stockholders' equity | $ 376,527 | $ 391,388 | $ 396,087 | 398,020 | $ 394,574 | $ 385,456 | $ 374,016 | $ 368,190 |
Error Correction, Other [Member] | ||||||||
As reported | ||||||||
Accumulated deficit | (1,176,468) | (1,170,512) | (1,172,943) | (1,178,909) | (1,184,187) | |||
Total stockholders' equity | 366,934 | 366,560 | 357,442 | 346,002 | 340,176 | |||
Adjustment | ||||||||
Accumulated deficit | 31,086 | 28,014 | 28,014 | 28,014 | 28,014 | |||
Total stockholders' equity | 31,086 | 28,014 | 28,014 | 28,014 | 28,014 | |||
As adjusted | ||||||||
Accumulated deficit | (1,145,382) | (1,142,498) | (1,144,929) | (1,150,895) | (1,156,173) | |||
Total stockholders' equity | $ 398,020 | $ 394,574 | $ 385,456 | $ 374,016 | $ 368,190 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 Segment | |
Revenue from Contract with Customer [Abstract] | |
Number of reportable segment | 1 |
Revenue - Summary of Revenue Di
Revenue - Summary of Revenue Disaggregated by Sales Channel and Major Products and Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 164,595 | $ 156,553 | $ 485,675 | $ 465,378 |
Subscription Advertising and Digital Solutions | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 135,433 | 131,293 | 403,112 | 385,472 |
Display Advertising | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 22,699 | 20,766 | 64,607 | 64,045 |
Pay Per Lead | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 2,381 | 2,739 | 6,927 | 9,779 |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 4,082 | $ 1,755 | $ 11,029 | $ 6,082 |
Goodwill , Indefinite-lived Int
Goodwill , Indefinite-lived Intangible Asset and Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Nov. 05, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 01, 2022 | Dec. 31, 2021 | ||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 102,477 | $ 26,227 | ||||
Additional cash consideration required to be paid to former owners of acquired business | $ 50,000 | |||||
Amortization of deferred revenue related to Accu-Trade Acquisition | 3,092 | $ 0 | ||||
Dealer Inspire ("DI") and Launch Digital Marketing ("LDM") | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Transaction Costs | 1,100 | |||||
Goodwill | 26,227 | $ 76,967 | ||||
License fee | 6,500 | |||||
Cash | $ 1,200 | |||||
Cash settlement of CIQ Acquisition's unvested equity awards | [1] | $ 9,626 | ||||
Revenue targets for contingent consideration performance period | 3 years | |||||
Preliminary fair value of the license | 6,500 | |||||
Preliminary fair value difference | 5,300 | |||||
Amortization of deferred revenue related to Accu-Trade Acquisition | 5,300 | |||||
Additional consideration paid | 63,000 | |||||
Accu-Trade Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Transaction Costs | 2,100 | |||||
Credit IQ Acquisition [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Transaction Costs | $ 1,400 | $ 200 | ||||
Cash settlement of CIQ Acquisition's unvested equity awards | $ 9,600 | |||||
[1] In connection with the CIQ Acquisition, CreditIQ’s unvested equity awards were cash-settled. The fair value of these awards was $ 9.6 million and was based on the price paid per common share to the owners of the acquired business and recognized immediately after the CIQ Acquisition in November 2021 as compensation expense in General and administrative expense on the Company’s Consolidated Statements of (Loss) Income. |
Goodwill, Indefinite-lived In_3
Goodwill, Indefinite-lived Intangible Asset and Business Combinations - Schedule of changes in the carrying amount of goodwill and indefinite-lived intangible asset (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill And Other Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 26,227 |
Additions | 76,967 |
Foreign currency translation | (717) |
Goodwill, Ending Balance | 102,477 |
Indefinite-lived Intangible Assets (Excluding Goodwill), Beginning Balance | 390,020 |
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance | $ 390,020 |
Goodwill, Indefinite-lived In_4
Goodwill, Indefinite-lived Intangible Asset and Business Combinations - Schedule of Accu -Trade Acquisition purchase price allocation (Details) - USD ($) $ in Thousands | Mar. 01, 2022 | Nov. 05, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |||
Business Acquisition [Line Items] | |||||||
Identified intangible assets | $ 19,900 | $ 15,679 | |||||
Goodwill | $ 102,477 | $ 26,227 | |||||
Dealer Inspire And Launch Digital Marketing [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 64,770 | 29,965 | [1] | ||||
Other consideration | [2] | 5,300 | |||||
Cash settlement of CIQ Acquisition's unvested equity awards | [3] | 9,626 | |||||
Contingent consideration | 23,936 | [4] | 23,805 | [5] | |||
Total purchase consideration | 94,006 | 44,144 | |||||
Assets acquired | 1,595 | [6] | 193 | [7] | |||
Identified intangible assets | 15,679 | [8] | 19,900 | [9] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets, Total | 17,274 | 20,093 | |||||
Total liabilities assumed | 235 | [10] | 2,176 | [11] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net, Total | 17,039 | 17,917 | |||||
Goodwill | 76,967 | 26,227 | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total | $ 94,006 | $ 44,144 | |||||
[1] A reconciliation of cash consideration to Payments for the CIQ Acquisition, net of cash acquired is as follows (in thousands): In connection with the Accu-Trade Acquisition, the Company entered into an agreement to provide one of the former owners with a one-year license to a certain product. The preliminary fair value of the license was determined to be $ 6.5 million, of which the Company received $ 1.2 million in cash upon the close of the Accu-Trade Acquisition. The $ 5.3 million difference between the fair value of $ 6.5 million and the $ 1.2 million in cash was recorded as non-cash consideration and the $ 6.5 million license fee was recorded in Other accrued liabilities as a contract liability on the Consolidated Balance Sheets and is being amortized into Other revenue on the Consolidated Statements of (Loss) Income over the one-year contract term. The current period revenue related to the non-cash consideration of $ 5.3 million is a non-cash reconciling item titled Amortization of deferred revenue related to Accu-Trade Acquisition on the Consolidated Statements of Cash Flows. In connection with the CIQ Acquisition, CreditIQ’s unvested equity awards were cash-settled. The fair value of these awards was $ 9.6 million and was based on the price paid per common share to the owners of the acquired business and recognized immediately after the CIQ Acquisition in November 2021 as compensation expense in General and administrative expense on the Company’s Consolidated Statements of (Loss) Income. As part of the Accu-Trade Acquisition, the C ompany may be required to pay additional consideration to the former owners based on achievement of certain financial targets. The Company has the option to pay consideration in cash or stock, which would result in a variable number of shares being issued. The amount to be paid will be determined by the acquired business’ future performance to be attained over a three-year performance period; based on certain tiered performance metrics the maximum amount to be paid is $ 63.0 million, with additional upside for performance that exceeds the tiered performance metrics. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation based on the following significant inputs: volatility, disco unt rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for Accu-Trade within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the Accu-Trade contingent consideration, see Note 4 (Fair Value Measurements). As part of the CIQ Acquisition, the Company may be required to pay up to an additional $ 50.0 million in cash consideration to the former owners based on two earn-out achievement objectives, including an earnings-related metric and lender market share. The actual amount to be paid will be based on the acquired business’ future performance to be attained over a three-year performance period with a mutually agreed-upon option for a fourth year. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation or a scenario-based method based on the following significant inputs: volatility, discount rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for CreditIQ within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the CreditIQ contingent consideration, see Note 4 (Fair Value Measurements). Assets acquire d primarily consist of accounts receivable. Assets acquired primarily consist of cash and cash equivalents and accounts receivable. Preliminary information regarding the identifiable intangible assets acquired is as follows: Preliminary information regarding the identifiable intangible assets acquired is as follows: Total liabilities assumed primarily consist of accounts payable. Total liabilities assumed includes accounts payable, deferred income tax liabilities, net and other liabilities. |
Goodwill, Indefinite-lived In_5
Goodwill, Indefinite-lived Intangible Asset and Business Combinations - Schedule of CIQ Acquisition Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 01, 2022 | Nov. 05, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |||
Business Acquisition [Line Items] | |||||||
Identified intangible assets | $ 19,900 | $ 15,679 | |||||
Goodwill | $ 102,477 | $ 26,227 | |||||
Dealer Inspire And Launch Digital Marketing [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 64,770 | 29,965 | [1] | ||||
Contingent consideration | 23,936 | [2] | 23,805 | [3] | |||
Cash settlement of CIQ Acquisition's unvested equity awards | [4] | (9,626) | |||||
Total purchase consideration | 94,006 | 44,144 | |||||
Assets acquired | 1,595 | [5] | 193 | [6] | |||
Identified intangible assets | 15,679 | [7] | 19,900 | [8] | |||
Total assets acquired | 17,274 | 20,093 | |||||
Total liabilities assumed | 235 | [9] | 2,176 | [10] | |||
Net identifiable assets | 17,039 | 17,917 | |||||
Goodwill | 76,967 | 26,227 | |||||
Total purchase consideration | $ 94,006 | $ 44,144 | |||||
[1] A reconciliation of cash consideration to Payments for the CIQ Acquisition, net of cash acquired is as follows (in thousands): As part of the Accu-Trade Acquisition, the C ompany may be required to pay additional consideration to the former owners based on achievement of certain financial targets. The Company has the option to pay consideration in cash or stock, which would result in a variable number of shares being issued. The amount to be paid will be determined by the acquired business’ future performance to be attained over a three-year performance period; based on certain tiered performance metrics the maximum amount to be paid is $ 63.0 million, with additional upside for performance that exceeds the tiered performance metrics. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation based on the following significant inputs: volatility, disco unt rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for Accu-Trade within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the Accu-Trade contingent consideration, see Note 4 (Fair Value Measurements). As part of the CIQ Acquisition, the Company may be required to pay up to an additional $ 50.0 million in cash consideration to the former owners based on two earn-out achievement objectives, including an earnings-related metric and lender market share. The actual amount to be paid will be based on the acquired business’ future performance to be attained over a three-year performance period with a mutually agreed-upon option for a fourth year. The contingent consideration is classified as Level 3 in the fair value hierarchy. The fair value is measured based on a Monte Carlo simulation or a scenario-based method based on the following significant inputs: volatility, discount rate and projected financial information. This amount represents the estimated fair value at the time of the acquisition. During the nine months ended September 30, 2022, the Company recorded a remeasurement to the fair value of contingent consideration for CreditIQ within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. For more information on the fair value of the CreditIQ contingent consideration, see Note 4 (Fair Value Measurements). In connection with the CIQ Acquisition, CreditIQ’s unvested equity awards were cash-settled. The fair value of these awards was $ 9.6 million and was based on the price paid per common share to the owners of the acquired business and recognized immediately after the CIQ Acquisition in November 2021 as compensation expense in General and administrative expense on the Company’s Consolidated Statements of (Loss) Income. Assets acquire d primarily consist of accounts receivable. Assets acquired primarily consist of cash and cash equivalents and accounts receivable. Preliminary information regarding the identifiable intangible assets acquired is as follows: Preliminary information regarding the identifiable intangible assets acquired is as follows: Total liabilities assumed primarily consist of accounts payable. Total liabilities assumed includes accounts payable, deferred income tax liabilities, net and other liabilities. |
Goodwill, Indefinite-lived In_6
Goodwill, Indefinite-lived Intangible Asset and Business Combinations - Schedule of CIQ Acquisition Purchase Price Allocation - Net of cash acquired (Details) - Dealer Inspire And Launch Digital Marketing [Member] - USD ($) $ in Thousands | Mar. 01, 2022 | Nov. 05, 2021 | ||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 64,770 | $ 29,965 | [1] | |
Less: Cash settlement of CIQ Acquisition's unvested equity awards | [2] | (9,626) | ||
Less: Cash acquired | (81) | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 20,258 | |||
[1] A reconciliation of cash consideration to Payments for the CIQ Acquisition, net of cash acquired is as follows (in thousands): In connection with the CIQ Acquisition, CreditIQ’s unvested equity awards were cash-settled. The fair value of these awards was $ 9.6 million and was based on the price paid per common share to the owners of the acquired business and recognized immediately after the CIQ Acquisition in November 2021 as compensation expense in General and administrative expense on the Company’s Consolidated Statements of (Loss) Income. |
Goodwill, Indefinite-lived In_7
Goodwill, Indefinite-lived Intangible Asset and Business Combinations - Schedule of CIQ Acquisition Purchase Price Allocation - Identifiable Intangible assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 05, 2021 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Identified intangible assets | $ 19,900 | $ 15,679 |
Acquired software | ||
Business Acquisition [Line Items] | ||
Identified intangible assets | $ 19,000 | $ 12,926 |
Amortization Period(in years) | 5 years | 5 years |
Trade name | ||
Business Acquisition [Line Items] | ||
Identified intangible assets | $ 900 | $ 1,446 |
Amortization Period(in years) | 10 years | 10 years |
Goodwill, Indefinite-lived In_8
Goodwill, Indefinite-lived Intangible Asset and Business Combinations - Schedule of Accu -Trade Acquisition purchase price allocation - Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 05, 2021 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Identified intangible assets | $ 19,900 | $ 15,679 |
Acquired software | ||
Business Acquisition [Line Items] | ||
Identified intangible assets | $ 19,000 | $ 12,926 |
Amortization Period(in years) | 5 years | 5 years |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Identified intangible assets | $ 1,307 | |
Amortization Period(in years) | 7 years | |
Trade name | ||
Business Acquisition [Line Items] | ||
Identified intangible assets | $ 900 | $ 1,446 |
Amortization Period(in years) | 10 years | 10 years |
Fair Value Of Measurements - Sc
Fair Value Of Measurements - Schedule of Company's Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 61,100 | $ 23,805 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 61,100 | 23,805 |
Total | 61,100 | 23,805 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 61,100 | 23,805 |
Total | $ 61,100 | $ 23,805 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule Of Contingent Consideration (Details) - Level 3 $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, Beginning | $ 23,805 | |
Contingent consideration, Ending | 61,100 | |
Addition Related to Accu-Trade Acquisition | 23,936 | |
Contingent consideration fair value adjustment | $ 13,359 | [1] |
[1] Fair value adjustments on contingent considerations are reflected within the Other (expense) income, net line on the Consolidated Statements of (Loss) Income. |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
Oct. 31, 2020 | Sep. 30, 2022 | |
Line Of Credit Facility [Line Items] | ||
DebtInstrumentCovenantDescription | The Company’s borrowings are limited by its Senior Secured Leverage Ratio and Consolidated Interest Coverage Ratio, which are calculated in accordance with our Credit Agreement, and were 0.6x and 5.7x as of September 30, 2022, respectively. | |
6.375% Senior Unsecured Notes Due 2028 | ||
Line Of Credit Facility [Line Items] | ||
Proceeds from issuance initial public offering | $ 400 | |
Interest rate on debt issued | 6.375% | |
Debt instrument, payment terms | Interest on the notes is due semi-annually on May 1 and November 1. | |
Term Loan | ||
Line Of Credit Facility [Line Items] | ||
Outstanding principal amount | $ 70 | |
Effective interest rate | 5.70% | |
Repayment of loan | $ 7.5 | |
Revolving Credit Facility | ||
Line Of Credit Facility [Line Items] | ||
Outstanding principal amount | $ 35 | |
Effective interest rate | 5.10% | |
Repayment of loan | $ 10 | |
Amount available to borrow | $ 195 |
Debt - Schedule of Carrying Val
Debt - Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Outstanding indebtedness, carrying value | $ 482,740 | $ 457,383 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Outstanding indebtedness, fair value | 439,000 | 502,700 |
Outstanding indebtedness, carrying value | $ 505,000 | $ 477,500 |
Interest Rate Swap - Additional
Interest Rate Swap - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
Reclassified from accumulated other comprehensive (loss) into Interest expense, net | $ 2.4 | $ 4.3 | |
Reclassified from accumulated other comprehensive (loss) into income tax expense (benefit) | $ 0.4 | ||
Swap | Designated as Hedging Instrument | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Fixed rate of interest | 2.96% | ||
Notional amount | $ 300 | ||
Unrealized loss of fair value | $ 3.5 | ||
Payments related to fair value | $ 3.3 |
Stockholders' Equity Additional
Stockholders' Equity Additional Information (Details) - Common Stock [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 9 Months Ended |
Feb. 28, 2022 | Sep. 30, 2022 | |
Stockholders Equity [Line Items] | ||
Share repurchase program, duration | 3 years | |
Stock Repurchase Program, Authorized Amount | $ 200 | |
Share purchased and retired | 3.5 | |
Share purchased and retired, amount | $ 40 | |
Stock Purchased Average Price Per Share | $ 11.47 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Award vesting period | 3 years |
Options expiration period | 10 years |
RSUs | Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Award vesting period | 1 year |
PSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share units performance period | 3 years |
PSUs | Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share units vesting percentage | 0% |
PSUs | Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share units vesting percentage | 200% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of RSU Activity (Details) - RSUs shares in Thousands | 9 Months Ended | |
Sep. 30, 2022 $ / shares shares | ||
Number of Share Units | ||
Share Units, Outstanding as of December 31, 2021 | shares | 3,683 | |
Share Units, Granted | shares | 2,290 | |
Share Units, Vested and delivered | shares | (1,572) | |
Share Units, Forfeited | shares | (783) | |
Share Units, Outstanding as of June 30, 2022 | shares | 3,618 | [1] |
Weighted-Average Grant Date Fair Value | ||
Weighted-Average Grant Date Fair Value, Outstanding as of December 31, 2021 | $ / shares | $ 10.95 | |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 14.34 | |
Weighted-Average Grant Date Fair Value, Vested and delivered | $ / shares | 10.63 | |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 12.66 | |
Weighted-Average Grant Date Fair Value, Outstanding as of June 30, 2022 | $ / shares | $ 12.86 | |
[1] Includes 63 RSUs that were vested, but not yet delivered. |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of PSU Activity (Details) - PSUs shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Share Units | |
Share Units, Outstanding as of December 31, 2021 | shares | 142 |
Share Units, Granted | shares | 275 |
Share Units, Vested and delivered | shares | (142) |
Share Units, Forfeited | shares | (59) |
Share Units, Outstanding as of June 30, 2022 | shares | 216 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant Date Fair Value, Outstanding as of December 31, 2021 | $ / shares | $ 23.98 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 15.07 |
Weighted-Average Grant Date Fair Value, Vested and delivered | $ / shares | 23.98 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 15.07 |
Weighted-Average Grant Date Fair Value, Outstanding as of June 30, 2022 | $ / shares | $ 15.07 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Number of Share Units | ||
Share Units, Outstanding as of December 31,2021 | 804 | |
Share Units, Granted | 263 | |
Share Units, Vested and delivered | 0 | |
Share Units, Forfeited | 0 | |
Share Units, Outstanding as of June 30, 2022 | 1,067 | 804 |
Share Units, Exercisable as of June 30, 2022 | 0 | |
Weighted-Average Grant Date Fair Value | ||
Weighted-Average Grant Date Fair Value, Outstanding as of December 31, 2021 | $ 5.27 | |
Weighted-Average Grant Date Fair Value, Granted | 9.39 | |
Weighted- Average Grant Date Fair Value, Vested and delivered | 0 | |
Weighted-Average Grant Date Fair Value, Forfeited | 0 | |
Weighted-Average Grant Date Fair Value, Outstanding as of June 30, 2022 | $ 6.28 | $ 5.27 |
Weighted-Average Contractual Term (in years) | 8 years 2 months 23 days | 8 years 6 months 29 days |
Aggregate Intrinsic Value Outstanding, as of December 31, 2021 | $ 5,754 | |
Aggregate Intrinsic Value Outstanding, as of June 30, 2022 | $ 3,131 | $ 5,754 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Fair Value of Stock Options Granted are Estimated Using Black Scholes Option Pricing Model (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Risk-free interest rate | 2.21% | 1.15% |
Weighted-average volatility | 65.22% | 69% |
Dividend yield | 0% | 0% |
Expected years until exercise | 6 years 6 months | 6 years 6 months |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Earnings Per Share [Abstract] | |||||||||
Net (loss) income | $ (2,941) | $ 5,545 | $ 4,340 | $ 2,431 | $ 5,966 | $ 5,278 | $ 6,944 | $ 13,675 | |
Basic weighted-average common shares outstanding | 67,680 | 69,067 | 68,775 | 68,576 | |||||
Effect of dilutive stock-based compensation awards | [1] | 0 | 1,878 | 1,248 | 2,489 | ||||
Diluted weighted-average common shares outstanding | 67,680 | 70,945 | 70,023 | 71,065 | |||||
(Loss) Earnings per share, basic | $ (0.04) | $ 0.04 | $ 0.10 | $ 0.20 | |||||
(Loss) Earnings per share, diluted | $ (0.04) | $ 0.03 | $ 0.10 | $ 0.19 | |||||
[1] There were 3,581 and 1,369 potential common shares excluded from diluted weighted-average common shares outstanding for the three months ended September 30, 2022 and September 30, 202 1, respectively, and 2,027 and 1,376 potential common shares excluded from diluted weighted-average common shares outstanding for the nine months ended September 30, 2022 and September 30, 2021, respectively, as their inclusion would have had an anti-dilutive effect. |
Earnings Per Share - Computat_2
Earnings Per Share - Computation of Earnings (Loss) Per Share (Parenthetical) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Potential common shares excluded from diluted weighted-average shares outstanding | 3,581 | 1,369 | 2,027 | 1,376 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, income tax expense (benefit) percentage | (47.90%) | (13.60%) |
Federal statutory rate | 21% | 21% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Varied from Statutory Federal Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision at statutory rate | $ (417) | $ 1,284 | ||
State income taxes, net of federal income tax benefit | 523 | 1,069 | ||
Stock-based compensation | 29 | (1,182) | ||
Uncertain tax positions | 52 | (963) | ||
Valuation allowance | 2,482 | 35 | ||
Other, net | (1,717) | (1,073) | ||
Income tax expense (benefit) | $ 952 | $ 140 | $ (830) | $ 1,257 |
Income tax provision at statutory rate, percent | 21% | 21% | ||
State income taxes, net of federal income tax benefit, percent | (26.30%) | 17.50% | ||
Stock-based compensation, percent | (1.50%) | (19.30%) | ||
Uncertain tax positions, percent | (2.60%) | (15.80%) | ||
Valuation allowance, percent | (124.80%) | 0.60% | ||
Other, net, percent | 86.30% | (17.60%) | ||
Income tax expense (benefit), percent | (47.90%) | (13.60%) |