AUTO - Earnings call transcript Q3 2020

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss AutoWeb's Financial Results for the Third Quarter Ended September 30, 2020.

Joining us today are AutoWeb's President and CEO, Jared Rowe; and the company's CFO, J.P. Hannan; and the company's outside Investor Relations Adviser, Sean Mansouri with Gateway Investor Relations.

Following their remarks, we'll open the call for your questions. I would now like to turn the call over to Mr. comments. introductory some for Mansouri

Sean Mansouri

Thank you.

statements I I statements today's historical of you or projections, from during intent by or forward-looking Jared, including Before facts, financial the or in safe and any not disclaimers company's remind call, are question-and-answer that the implied that events are Actual introduce session, outcomes performance future regarding contained filings belief and forward-looking including public future today's press statements statements. with expressed the are in may what differ by these materially results covered or the harbor statements is release and SEC.

over by company defined adjusted provides non-GAAP and most statement reconciliation measure of reasons comparable Regulation measure that to as measure financial to company's This that Specifically, management the the website. please G. are filings financial directly AutoWeb to with those was quarter the from company's disclosing information during a management GAAP which SEC Jared. filed press statements. the differ refer These prior identify useful investors time the time. to of SEC be believes is why regarding filings made will cause for disclosing by a from turn posted as this to on other A this With call company's results to condition XX-Q EBITDA this operations note September materially as XXXX, release could Form the results and to EBITDA. Please ended the is included that XX, call, I'll call non-GAAP that also the financial forward-looking factors in well today's adjusted that,

Jared Rowe

Good Sean. afternoon, everybody. Thanks,

operational the of quarterly throughout our plan the continued on discipline profit metrics our challenges reflects improvements key of and of progress to since our levels business, also our the success quarter, to the gross operational continued automotive third Despite COVID-XX-related across and with flexibility. we the financial led which throughout margins XXXX. During highest entirety execute overall key market,

of in in alike contending the but our American trends lows consumers production consumer reductions of strained QX, at since well dealers' quarter, with of in and QX the retail inventory back the historically wholesale auto as vehicle of uncertainty. production particularly still quarter the demographic. effects new used-car delayed a pick pandemic Although really consumer broader throughout America, continued the is industry-wide project and end passage macroeconomic last as the Meanwhile, much confidence core books, which challenge bill across North dealers industry and have high our has of to levels. began stimulus the up new improved to pricing are Middle

this profitable So at adjusted all-in-all, efficient and metrics increased deeply buyers. these particularly car higher across we have the focused purchasing of level. EBITDA resources staying dynamics. growth, environment, have our altered profit This vehicle factors translate to a really into number drive In doesn't always overall, gross the Well, with on shopping industry. online

more accurate to leads industry of could a quarter, true in QX. to we last of far rates, at reflection spend, media As than levels intensely did a such, of which numbers Similar mass-projected continue we driven a selling demand. greater operate consumer provides have lower we

are vehicle. car vehicle result purchase of for of in likely leads of that a believe submitted near-term may more a our value by Instead, our monetize reasons would preserving larger are taking amount concentrated for set to business, earlier. targeted However, been not providing strategically buyers by high-quality, them leads. with Instead discounted this have leads much the our premium that mentioned a difficult customers traffic we're out I customers action-minded for we we higher-margin to sales, providing of of who volume delivering by

more volume improve. driving start expect as gradually We selling rates to

we're vehicle are initiatives matched not an we'll the positioned who for can helping transactional so on more on at we transactions where we're media talk us a be improving really efficiency mind, remind scale. sellers to efficiency, on headed. facilitates them. shoppers, and monetize Yes. stay meet with digital their impression-based creating Where everybody we're like digital margin, that's properties software process platform quality focused most about marketing The that a to do integrated Rather, we're active strategic about working in implementing vehicle the needs. that can automotive the create efficient for I'd when is or with actual diligent However, focused well marketing how a automotive matchmaking talking approaches, with focus really efficiency. the of car

said, to offerings enhancements that made service matching the we process product buyers to some and quality key our of sellers. and already between Now our improve have

the of turnaround marketing funnels. during in our with efficient improving we've spend conversion One being more capabilities focused our lead on that our is consumer by

for to experience second funnel of mobile out of more campaigns, new, gains began lead the XX% those roll in As during contemporary I conversion we audience mentioned a last some resulted and over quarter. our quarter, lead

optimizations always those these mobile to experiences our And majority It in organization was sorry, noting into worth while we're QX, these optimizations. our to want far I engaging to audience translate just another QX driving across well mobile optimization in audiences the how contain at the were conversion that our experiences. I'm past media. which how even of we in of the don't to extremely engage users these audiences now with the model, further that efficient, continue said, We're have and pleased years campaigns. lean, our as least to process is worked we of that optimizations and So of that we're report this for new gains AutoWeb operate us meaningful going the have more this an to execute Yes, segment. and competency that leads essence, one with we rate operational to consumers. vary for remaining dealer that for the specific of beyond. expand is in commenting in we conversion and are, a audience XX% really But – on in with underscore performance to it The expect customers that demonstrate going turn we QX I like discuss and improvements about audience. gains XXXX, what that new durable to how establish our organization. conversion pleased over thus in diligently portfolio I'm further, our results. performance AutoWeb We and these revenue-generating mean, organization, consumers foundation able to allow deploying converting Across audience, the offer results place. a to by efficient mobile making our think larger But some maintain continuing mobile number the have before against to to making support soundly I'd two on our We over our to have future. implement improvements we're more this engagements walk turnaround their to deepen focused the J.P.? best to strategic between our be understanding bit the our our we're financial we of and our efforts to I'll through initiatives to J.P.

J.P. Hannan

to million. everyone. afternoon, sequentially $XX.X the Total Jared, and in down from X% was thanks, quarter. This quarter good revenue year million the $XX.X Well, increased third for ago

quarter. $X sequentially the was challenges down declines are expected ago with $X.X industry. line million when the COVID-XX-related our that increased million, XX% Our digital to throughout to compared year revenues to year-over-year The in advertising and

demand mentioned, market lead Jared marketing this in as volumes true spend reduce proactively However, click our we've aligned to with and continued our to keep environment.

X% sequentially the Now of $X.X the this success line, million. X% which and year-over-year to is reflected in strategy gross increased profit

our Our This a increase improved increase improved to basis was revenue third from quarter XX.X%. in business. clicks a recovery leads and modest as margin of that's XX well an driven by gross approximately sequentially points mix year-over-year our XX.X%, as and business significant increase our in

or of during also to which loss share in of due share, were QX net and reduced loss second loss in quarter, doubled compared management. $XXX,XXX Adjusted to disciplined to a operating per last net to a The of $X.XX from cost share XXXX quarter approach year-over-year quarter. per per to expenses down X% XX% XXXX We XX% our or compared and more and $X that improved that's million, $X.XX QX $X.XX and the $X.X ago was sequentially discontinued improved or million in to in from EBITDA significantly million net of million, year loss to the a of and than third $X.X the up $X.X quarter which the year.

our encouraged very validate resilience the are growth of turnaround. continues to by We it as this

anticipate ahead, of Now from straight growth line looking here. we don't a

portion And of breakeven due stronger our and XXXX. compared as September XX, quarters million our to operate CIT XXXX, $XX.X cash had equivalents EBITDA Northbridge business, cash QX and QX the to an September near million levels is year-end typically our and to sell-down adjusted of model – stood then as credit. $XX at dynamics. facility XX, of seasonality outstanding back $X.X our that XX. to our is there in and goal $XX at the with we million, restricted from holidays ramping break And credit the June business to an At balance Given in million such, slowest on perspective revolving before up are

liquidity trends very off. And to comfortable our to liquidity we're improving our sheet pay and prudently with our going forward. and Our managing balance commitment costs present continues if hold,

Now securities statement SEC. may of constitute we any registration filed statement have as company. This a an not the and you yet seen million is also registration $XX does today, not with the offering by shelf effective

business. any map. to momentarily a going statement flexibility color provide any not provide for immediate desire in capital access the opportunistically outlook our our Although invest place should offering come to is we having us back more in have markets do of on road plans and to to with securities, registration strategic Jared we

ahead. we've and plan run efficient on environment Now evolve navigate phases remain of well looking they organization. effective been positioned our next commitment conditions closely financially monitor delivering XXXX. to and QX for to prepare we'll an market as as months long-term believe But to all that the we to we ahead growth. the industry and our over And year, this continue doing We

going with Jared. And so remarks, over to turn and it that to conclude prepared I'm back that, will my

Jared Rowe

Thanks, J.P.

consumer be leveraging revenue our optimize demand overall and automotive disruption So tools the the our our media see plenty mix both earlier, of for and mentioned spend. and budgets. automotive market by is as recovers. modernize to efficient This we we're and have ahead as by impacted lead remaining with click to products have new initiatives COVID-XX-related automotive opportunity to traffic with working to Nevertheless, consistent I advertising search continued pattern still volumes our overall We products.

to buyers. current for the business, our clients prioritizing So dynamics continued vehicle value a value from they by other while stability period media. provide and to source of funnel them operational really acquisition. we leveraging with of ultimately been uncertainty, efficiency to dealers offering of can leads and these our than a OEMs can attribute customers adapting driving momentum to demand cost of our actionable high-quality this might Leads forms our real they high-quality drive in advantage during We've to and in serve effectively pricing leads car continue We purchase have and sales. as support more intend to that this by lead in action to continue leads and lead will improving improvements able lower maintain sustained

next transformation the we through to organically strong for a opportunities business foundation which and strategic place, our innovations, some of with we're operational Now appropriate. where expect stage preparing through accomplish inorganic in product now

we outcome mentioned users they've estate, verticals, Other algorithmic highly mind. and real internet to shopper filter-based as the home preferences, digital matching I shift with future from consumer, automotive insurance, searching such occurring sites, using sites, opposed believe to relying all see that marketing each sellers at far to already be match transformation to specialized funnel prefer value certain same us that We're and simply sell, prefer set a This and can of how delivered better time, automotive improving on product marketplace. we we dealer of profile Today, optimize retailers of point understanding on optimization. sides with as customers more and our desired our a more drive internally over a sellers. intently on and The earlier, the know and As can buyers matchmaking plan for how and better represents alike. interactions how business each evolved dealer intelligently OEM both has product services pair their focus buyers the retailer marketing. proposition OEM to and do to improvement efficiency transaction-oriented buyers on and employment our and our will We which sales we'll on We in digital we the in We consumer understand we evolution see based that focus more product needs match sellers. now automotive. specific the to end-market and consumer be evolve most has based. within product car to very you'll can just unique each buy can for geography. companies But consumers match ultimately price media better evolution

does will, highly into matches. turn, to we preference-driven matching transaction and while that occurring, can our that this able much process. We margin. With capture highly the nuanced a the car increase mind, these process optimize of likelihood data of be approach properly buying factor client that so this is as helping want in However, not to nuances facilitate believe we in as that possible tailored to the

earlier, categories mentioned made similar I other transformation. vertical have As

really of we're confident So needs. market in our what the assessment

the such best-in-class trade-in as customer implicit more of digital and Now – Think finance this retail-ready scale. is this at intention matchmaking marrying in costs embedding conversion consumer as components our dealer-enabled acquisition of components our retailing in with funnel, enablement. approach

Our resetting really approach AutoWeb. pragmatic will approach follow current out functionality to our to building this

features build these by So to built trying for of of that being acquire existing out efficient types all and much be time match with would a retail-ready more of integrate are able already ourselves. capital to use than or out components

we continue the shift platform matchmaking digital support to of towards ourselves we and be to As the in that what retail consider most want to transaction, vehicle elements an as marketing the integrated powerful supports way. ability industry a critical establishing a we unique have

work area has in begun. this Some already

exciting long for road us business. have This our we trajectory do evolution a really product with provides However, ahead. a

for proved transforming has keep laid continue and Our digital marketing. to strong automotive resilient us industry-wide through strategy has transitions to broader our operations the extremely with groundwork be year this headwinds to pace in

quite just operate at we our is periods while investing very business. we As frankly, that in far. the slowest into which earlier, business, look goal as started future believe the here. very, adjusted in even J.P. EBITDA, for to early we've progress of near proud XXXX we're our our the ahead XXXX, of the are breakeven We're outlined getting made thus But and traditionally end of levels

team next as entire of and move as is as committed Our continuing ever AutoWeb. to excited here phase our we transformation forward the at to growth

with up questions. So to it we're that, going for open

Operator

Thank you, sir.

question-and-answer will begin ahead. first from Please Barrington Prestopino question And We of your of now the line go Research. Gary our comes session. Instructions] sir, [Operator

Gary Prestopino

J.P., how Jared, doing? Hey, are you

Jared Rowe

are well. you doing? Gary, How we’re doing

Gary Prestopino

fine. Just couple of A things.

down The going your as all first just to through is write narrative thing you trying and were that.

And of and be of about black we go the breakeven that here. is uplift the And doing there's to to to what levels the to of really guys more EBITDA. as the at come going on One mean, forward, you something mentioned investment goal you're I kind transform you've company? started operate into is because,

Jared Rowe

is things Yes. stabilized here. little invest Gary, bit on product it a to transform more side going two I aggressively of we in financial. the we've plan because do think really business the the there's One to

from really there. so we feel good turnaround a And financial perspective,

to and QX best wise. top macroeconomic is and think do the it's we not that's seasonality. for that QX need again, make our to to The great but the [Audio for of do Dip] now, approach other drive see we now. out are selling because seasons right us. do in and ahead And to that, thing business days better we make little On there automotive, it's this be right investments uncertainty ahead we all historically a follow continue conservative we intend –

Gary Prestopino

Okay.

for be talking So the just kind that issue would QX you're of hitting about, and that P&L? QX this

Jared Rowe

selling are seasons. and because are the speaking, those better big QX Yes. QX, performance-wise financially for us generally

get the of where to again is And so middle ours the as But recovers, the of really year a campaign. the mid like the business market we'll benefit that. tends

Gary Prestopino

your do is you – is don't it your clientele but like base have get I like has stimulus? badly when think the the seems growing, that mean it just more new then, hit been here looks client And mean, by in economy hit there market? when And does transfer how no fact you these government I out the these payments

Jared Rowe

Yes, it does.

when the been earnings consumer the matters economic who what's you When look levels to of a who, the base unemployment America. look going at are are Our the month downturn. the $XX, folks education is the level, of these really COVID and a folks hardest perspective. our payment and with have use folks $XX, who some services, $XX them these Middle at And hit by on just really from general you

aren't that sites see do Middle is Gary, lot of again, about fair there's maybe very that buyers, a folks when strongly out is because user there. So we talking we you yes, the out as believe But base like statement, users car there. our our that those a some as of other American you're affluent

And a so real buying we population. deliver value segment large the of very to

Gary Prestopino

me? contemporary you talk just then this And kind funnel little that experience and just simplify a that rolled of Okay. we out? just bit we more new can into go about Could that lead for

Jared Rowe

Sure, absolutely. Yes.

probably we first when So from that ago, progress kind here a we this have recall years experiences. I the when of actually – didn't a that showed mobile on And making talked perspective. mobile you'll of team management calls we're couple a we the couple about up of think

were bunch we mobile just I just mobile to thing to we enable convert experience. benefit is spent sending did guess it mobile experience conversion of traffic one of grade didn’t optimizing And enablement, the them created, first the as thing that, mobile to another was them years desktop experience. of desktop to we really Stop X.X about kind year, the that the tweak just experiences year, those really is cycles for basic X.X these they So And trying a because better. is, experiences our mobile years. and that's iteration business And experiences well to me say rate. experiences, on but the best make as actually It's the in Then all know time focused way they first that mobile of multiple work have have a conversion. right? a make to we experiences,

small Our is the that the time. improvements all about business up tweaks, add right small over

so But then us, took of that the and always erode we process the same rate mobile it this so is understand And how and at little that through. the for as get time and ultimately, then, many on us bit we virtuous those start which to time, right? them don’t the the send conversion you through quality, the that possible. close as the experiences leads interact a of triangle It's necessarily to cost media, rate with optimize can built we've them take really consumers

getting then see there's optimization it And we've started where through took a start in process. showing us you lot it time and But that started I QX. tweaks this in period just QX cycles. optimization So the you will and in made small And just an tell benefit and bit to of that probably again, of XXXs of over it's carried we're Gary, extended of time to cycles the on us could QX. again, the got up of benefit a point

it. to was way So helpful. describe that's the Hopefully, best that

Gary Prestopino

now your versus of is right mobile traffic much desktop? How

Jared Rowe

XX%. North of

Gary Prestopino

Okay. Thank you.

Jared Rowe

Thanks, Gary.

Operator

proceed. Eric Martinuzzi And you from sir, of next Sir, Street. question Lake may your

Eric Martinuzzi

Yes.

people, topic. QX, of know, the next a little talked that million. bit about wanted at quarter? $X.X in go look that there's investing I as expense the operating does business. just we Typically, to You Where

J.P. Hannan

go I some we that next the And talking goes that's about up Jared year and things into software that do, mentioned, development, be think what the that is there'll of slightly. the as downturn for up what will be QX. immediate of sort flat capitalized of that is, products. – more seasonal think we where we're to I Most It's facing costs. and as most the QX Jared really some new additional on

Jared Rowe

we efficiency. I little about of if where upon and it just Yes, some bit. new expand do see Eric. a any the a right, the investment terms the build rate or you'll that And one tend conversion talked reasons the approach, lose new of of could to – we is And way on efficiency, efficiency, monetization efficiency rate we time we in click-through experience and

new new side, before backwards as we've And make mobile the like too, go experiences. of these so got these kind some we we of investments, some forward to with on of go

away and then but top point, carve will to Instead continue going day, And of of resources focus, it's because we'll with only on which have innovation, may some many we and of mean mean differently. away this will our ultimately we which to just optimize going so a of just some get cycles we on that focus and ultimately a it in of focus – going teams to that, the some we're we of as we hit that, so expect efficiency it We've so done this be are just general. won't take our But way to something the we to trying is allocate future. some do trade-off again, it before, be it able the seasonality effectively. J.P.'s grind are of. products, towards fairly to existing to from build very too, to of through some business the manage our lose aware and the we're XXX% product in And

Eric Martinuzzi

I lockdown count? dealer a the of stronger, couple seasonally QX decline? to have QX Okay. decline exiting that your questions I of would quarter. COVID the the behind on What's be Why retail retail first your quarterly in that want count would quarter thought operating the ask dealer metrics. kind

Jared Rowe

and around you publics they've in headwinds into could some dealers some and of ran announced. the profitable see with We levels. QX, how inventory Also, exceptionally that were

we inventory have the we on the saw and was even the levels side. what on used high didn't side new of car who dealers car so saw And

was that profitability. and And so they harvested did pulled they back what they

and thing did about, on And pullback. of we've took talking more, lose dealers the is the dealer been we it is up, which went a we And the Eric, did thing the retail really nice side choppy selling our got but of and a good it's it confident side results We so see who are. choppy, The the it, stayed a we're capacity continue rebuild We work of like some time. some we'll do bit dealers. little means the in the And good over have we ability motion. to results in – where quarter. quarter, to these to have one

heading Next saw quite we around that the backwards. the a what of we're But them QX. dealers with frankly. dealers. quarter, But am be just that they back confident response we'll saw blame things, profitability we're that pulling harvest to doing would lot direction. go could and the Don't in right my right I We in so

Eric Martinuzzi

and click – historically, up, those traffic And the then traffic your directions, down. talking – your different saw correlation been on We again, going there's in saw a What's here, behind that? click but we sequentially I'm metrics traffic. Yes. between lead lead traffic those

Jared Rowe

Yes.

of the click click seen side slower. interesting little the product, lead harder because the come it's than traffic and in the a is and QX click traffic got QX, as business. And back the hit So you've

some on leads have for but have also in high-quality the network, product, SEM off traffic, publishers not our we – their our the And generate perspective, off automotive so our sites. but the from clicks sites, deployed technology or traffic, essentially we a of of traffic just we traffic

our or thing the down. And back And dynamics per and And on it our up. goes goes goes revenue our revenue The it at I so interesting well. up, this traffic sites look spend QX, always have the our we've think, spend traffic but goes one traffic also per SEM QX of traffic or us down, other you've both these pushes then story is as the got is if on got an ways. click dynamic around the impact could QX, When publisher sometimes when SEM interesting click. also query click of traffic, important, I real where pulls

forth internal down, put metrics. revenue But and external apologize. and per click back query it's revenue I between my that number recover. and starting has to So gone per I metrics and my

because this And a again, sign harder in is my a side the good search-like so this product. got hit than lead that's mind because,

people QX, you does when QX see it it spend a has the per in the projected revenue search on like click at back line it for time of query click saw more per on impact pulling So the than of we revenue or and product period out, a lead on direct side.

good So those to on more feel it. get conversion. We click play our about business. bit dynamics are did It's that inside We the the a little efficient starting recover.

our because click but a want monthly a on was Some levels, QX, basis, go on to to it. it about way you've say, of That lowest. that product what I the nearly long got pre-COVID product we've the But click of it's strengthening of half that seen is digging out carrying way was through. in we're

Eric Martinuzzi

you – have gross use I for assumption for good QX, on guys and here in realize for obviously, good gross work gross the to that but to seasonal the done margin? targeting? are The don't want QX, I what's take sequentially margins and we’re profit especially a granted, up QX it you XX.X% from but Okay. facing QX. here, pressures What

J.P. Hannan

in think is targeting. I range, we're this I Well, what mean, mid-XX%

and still were to on went interesting as revenue what's you the margin. expand able up, saw, this think quarter I we

can And think I with we a that part a so even good of hold little revenue decline.

Jared Rowe

stuff. talk a got there some we're driving we gross like, quicker, levels. we the frankly, And reasons why improvements anticipated. and confidence of some about holding Eric, there, then durable efficiency of us process important than part that's of the just give sorts Yes. quite Those these will is in initially the the We one margin mobile little

feel We so we those good be need too. We're pretty team we And focused hold to isn't tools transform track profit we we about know We're need to of continue to going very listen, going the to We line. those lose know some the to make us to product to this have that, investments. to going on But numbers. lines. management the do gross set. available

Eric Martinuzzi

that, Certainly, progress. microphone. appreciate and Thanks. the I it’s see good to I’ll the release

Jared Rowe

Good you. to talking Thank you.

Operator

question, B. Securities. Lee of Our sir, from Riley proceed. next Please Krowl

Lee Krowl

taking for Thanks my questions. Great.

– follow-up improvements forward? kind gross other just future you commentary to are level sustainable of on trajectory. and XX of Or that to product there expansion? there last Just kind is clarify, elements efficiencies guess, go the the a I margin that around is can mid-XXs drive

Jared Rowe

Yes.

let – go – would me I ahead, So J.P.

You go ahead.

J.P. Hannan

yes, going, there but there, do opportunity from it take I think Jared. is was for expansion, you I

Jared Rowe

agree. say I same talking I transformation. the each had, going to to we're other. product going over It's as we probably require No, thing was

Now we've some clicks margin going with about can total in and keep that to going line. And business talked have, the a wholesale, extracting had percent drive value of retail we that right? on out And listen, right, it. keep as past, gross things this there all the In improvement versus could mix, we're – is right? these maximum of grinding to we're be are revenue, that

just core are our think intensely the trajectory good matchmaker have we set. matchmaker continue is, the is go But can we here. we The get we bread So ourselves this things and Where we to real just ahead The and really It's the we But where optimize that good. some alter there's take products want longer-term. business out still of think right? to we in is the of is on this think there business. of to The short-term, over the opportunity product that transformation the stuff. do don't approach, We opportunity butter, products that have will to the business we product is want the there. for set approach, with have useful.

And next so that is work right of mid-to business in where think exciting. invest can from and we the phase again, margin screw while the we doing we're try is and gross kind which think live perspective now really low a turn to XXs we the we here, where of

Lee Krowl

it. sense. Got makes That

new dissect and used seasonal seen across industry inventory respecting in Fully the pullback, recently. of me, just the we the kind guys the component definitely just talked You or headwind since I to have a that kind of of have of of kind wanted industry your – until we've up obviously, about a to recovery excuse seasonal that impact inventory, outlook. is kind

an expect components kind partially help seasonality just new seasonality excuse and me, of the and improvement that the to seasonality QX inventory inventory new work QX? typical – seen of or in out QX you and offset we've do headwind we So in through washes the that

Jared Rowe

a get and seasonality on look not of you of incentivizing environment, those they've that If like see the then a I those Yes. May then continued here, in I'll June that's We all Lee. softening an wish lot we time, into finally hopefully, some is met, normal business. we same the list my in been list showrooms. for. wish the could some wish to and cars so pricing. side right, that wholesale the the just we OEMs government I'm by certain. that through gets systems think stimulus. dynamics And awful reaction the At necessarily new ask the vehicles since see My interesting current terms building give don’t dealership of see But and list my the

put folks' to bit in their I'm going that disposable I'm some of car really hopeful can they use money attack sell yes, income hopeful that car QX, if to that have pockets now. know You if then, listen, all start that do right really got side OEMs better but our incentives. just buying we to be want on in they're on And down – sit or And something have that QX that expected. a than outlook, the that new with is don’t I'm attack that pricing used I in we some bank hopeful I'm and that that cars. more right? that's inventories they've soften, I QX. and that little not, to can't some means the bit continues confidence to hope. Lee, hits, could as so somehow, money question that hopeful is So more financial little your which a to answered directly build.

Lee Krowl

QuinStreet helpful of a relationship evolution question, guys And of kind to outlook. press kind kind relationship. Last that That it. the Got frame release just you out sense. talk about near-term makes put and a opportunity of of the and definitely long-term? Maybe about

Jared Rowe

One in product, then I and our – buyers. things. think about, endemic, to talk We couple talk Yes. Well, of traffic non-endemic near particular, those click product. a so is we rather those our about endemic selling clicks

audience. in buyer partnership someone a when think of a us allow scale who strategic QuinStreet time. optimize that interesting We It opportunity. business there. there's I a value And find in more that really development know a of it's those distribution is our near-endemic great one sees finance, we who a it's like over has QuinStreet out real automotive is to example

we more opportunities, like. to the I I've endemic buyers in think of of the very both our more than been clicks fact we and non-endemic open there's sell near-endemic So side. about would those that

traffic, So consumer also a who they're example nice someone auto this values delivers us really about Most their a think who into our don’t value until insurance buying car. about consumers is just of our base. thinking transitioning finding real

So strategic nice fit. a it's just

I sell insurance, there to would Lee, gross back some as our try funnel thing who, finance valuable dealers I advantage to It's car right, though them think benefit right, traffic What access that, to the And is us these going part and F&I, most well. the very to insurance. dealers uniquely of opportunities more audience continue say, partners of out don't see say one in big take ours. is, would of lower and like of then too, again, benefit listen, our there's of profit. I to near-endemic and also like targeted consumers getting and you're a

these We're we're so business in things, And competing think we of in with as clients. clients. about of our not the our helping too, business the

things, so we're And to them focus to a about going very as on client-friendly just understand, think in we way. these

where can and grow that's we nice optimize sense a relationship And we this And the again, all it's that in think so world. the made over time.

Lee Krowl

Got for my taking it. Yes, that makes sense. guys. you questions Thank

Jared Rowe

Lee. Thanks,

Operator

next may Ed of Woo Capital. sir, you Ascendiant And our from begin. question Sir,

Ed Woo

do taking over how I months? look do look what for the be thanks car it And think business think sales next the early but my will, know like? you industry car the you might a little to Yes, will XXXX, into change I six question. guess, used

Jared Rowe

better a perspective. answer for you. what's little on had about I going wish nervous from a a I'm I right macroeconomic now just

that $XX guess, see we the mean we're strength number but momentum so can, certain what, there. was saw. And I to $XX carry less to not we can be to million, XXXX. interesting I It we sit when to. will us tracking so side, $XX.X through million I'm if that I'd as used million on the right now. SAR car like we And we see continue at,

that's as were, around new pressure strong they have the OEMs going that's with do vehicles years car confident to couple buy incentive something from as going where it's or I of was consumers environment in trade-off I the differential. a financial Listen, creeping years quite pricing up a been used of do the of aren't And several economy for think put is as an quite do perspective. once because it of the react some and on to to decision now. once outlook an I a new how now, as car buy isn't in affordability maybe that their

right and is seeing our too see answer So transaction, more just digitally to way know an variables, wish fluid to to too continue innovation the a in today. around they over see But the next couple a be next now new plays bit out we I approach this of can a conservative come XXXX today. for I we'll I wish trade-off I you're optimistic which just think there's because little how I bullish of just be we allow had have year. which could as we or Ed. bit consumers do access many why – think more even you, want kind QX quarters more to I many us going lot sit to the better to is because in you're used than this more here between unknowns for going about me end enabling and a of

Ed Woo

answering Definitely my understandable. you good Well, for luck. and thank questions,

Jared Rowe

Thank you.

Operator

from sir, Prestopino ahead. go a Barrington Gary of And we do follow-up Please have question Research.

Gary Prestopino

Just click a what was, among the advertising quick question I that display and you here. guess, revenue revenue out revenue? breaks how was the Do have

J.P. Hannan

I broken don't in it’s in – yes, exactly. to it's We – number know the the think have XX-Q. The there. I is out

Jared Rowe

revenue. is the you tell vast I'll And majority Gary, what is click

Gary Prestopino

Okay, the I’ll find it Thank in you. [indiscernible]. queue.

Jared Rowe

to on add that. to just Gary, And

decline for trends revenue, a ad area it's the not and in focus all because like about of us. of in we've display the past periods, in has bit the talked of core display, So been a kind

of is So it the the click bulk side.

Gary Prestopino

you. Thank Okay.

Operator

sir, question-and-answer call time, And for Mr. this at Rowe to now turn session. the concludes I to our this closing would over like remarks.

Jared Rowe

want just to Okay. I joining appreciate the business. everybody interest call. thank continued in Well, your I say you. the appreciate We

on just very that the a proud uncertainty, in And out whether the going I just the – to pretty environment. team thank last AutoWeb what's of been have home, the at your rough going challenging couldn't team. quarters what's has be the I the on market of overall. support uncertainty We all there, team business. in This just on appreciate work done continue want the because more of couple be is also of to it economy the overall

certain you I I work of So for work. all your because to them this all just say your want make thank to is great

on So we XXXX about forward thank full call, you. forward earnings QX speaking again and that, year look than we're Other just to the next and to looking results. talking

and for we’ll again So time, soon. thank your talk you

Operator

call. Ladies conclude conference this and today's does gentlemen,

participation. your You at may Thank lines you disconnect this your now time. for

AutoWeb (AUTO) 8 Nov 202020 Q3 Earnings call transcript