CARG - Earnings call transcript Q3 2024

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Operator

Good day, and welcome to the CarGurus Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Kirndeep Singh, Vice President and Head of Investor Relations. Please go ahead.

Kirndeep Singh

Thank you, operator. afternoon. Good welcome Third to Call. XXXX to you delighted Quarter CarGurus Earnings I'm and Financial me are President Sam Officer; today the and Palazzo, Trevisan, Operating With call Officer; Jason on Officer. Chief Executive Chief Elisa Chief Zales,

and to our relates the decision-making. With metrics future past that, financial used prospects over provide our operating performance operational concerning results, course of non-GAAP in During can our such on to are useful be to well are believe expectations our the it on risks will GAAP which we updated the our forward-looking differ those in Relations be overall law. Further, based call forward-looking by SEC non-GAAP certain We which actual of as presentation, risks financial to as from and website. these to information in measures. filings, Relations business we and statements. and the which reflected measures transparency These I'll could greater refer and section investor our materially the statements as other about Investor results enhance is or of cause update to understanding financial in the will today the our call, our that can found included except uncertainties beliefs. financial A measures call its making section obligation and as SEC's Jason. discussed by statements, be of and in found statements, Information subject website today, current press now issued no allow comparable non-GAAP website. reconciliation revise in uncertainties, those and which turn We our release management undertake our metrics of required is on Investor for during to

Jason Trevisan

for of today. thanks Thank joining all you Kirndeep, you, and us to

We results. quarter are extremely proud of our third

expenses operating with EBITDA the impressive and guidance drove high revenue above performance, our revenue end flat Marketplace our growth further accelerated of consolidated Our combined adjusted range.

continued as our dealer priorities partners. We value are our have executing provide well more increasingly strategic we to against to

As share in marketplace broader a gaining industry. result, competitors and auto are our we market outperforming the

and We platform to are we functionalities continue in partners, processes. Simultaneously, insights, supporting data our actionable deliver for unique to build their and consumer daily tools our that extensive leverages transaction-enabled dealer a them deepening decision-making operational our these across leveraging our and efforts experience share the growing wallet connection our to base our with consumers efficiency. channels. cost shopper Together, are among increase dealers enhancing while existing

for delivered we and allowed robust Mike pipeline and our a growth. In Importantly, to our attracting while strengthen CarGurus. welcomed as Revenue at team, Officer; new innovation quarter, Officer. Hanson Jennifer In the Chief we September, product our People quarter our execution investment in as new continued strong executive new talent continued Chief we this O'Hanlon ongoing exceptional earnings third

high We join expertise end on contribute EBITDA last and are the summary consolidated of team. Like of high-level X revenue financials, updates our quarter to thrilled have ended exceeded the quarter, of We third their drivers we've creation. us begin to progress adjusted Jennifer the our at forecasted a range. across and range I'll value made and by guidance our with followed Mike our

period the adoption $XX tiers about quarter, basis revenue year to delivering Our year-over-year points and this products new XXX to greater driven grew expanding adds of comparisons towards Marketplace year-over-year by XX% XX%. Despite grew dealer prior year-over-year XXX consolidated with migration ongoing margin year higher to prior expansion increasingly margins in again XX% EBITDA getting was and subscription Growth services. versus from value-added year-over-year, globally, approximately difficult. accelerated XX% and million XX%. Marketplace non-GAAP EBITDA expanded results or points adjusted revenue expansion. basis year-over-year growth

we of as business to experience international revenue a continued our Our was and to XX% experience share In performance again strong expanded we contributor growing traffic Canada, momentum with further continue our to Digital year-over-year. to great Deal introduce and our replicated products and grew and ahead Rating. new such competitors. both playbook session Best growth Deal dealer our We Next base market as domestic in our share geographies

our Finally, new delivered quarters supply year-over-year of normalize. business advertising to continued OEM the revenue as level X growth double-digit of consecutive car

and retention. In product across ranked Xx dealer reports drive value tools, deliver insights and and leads partners. our in services two, surveyed and to survey and quarter across New enabling increase strong same yet ranked the Core the up enabling the of both dealers. ongoing innovation introduce more to for we vehicles. highlight product beyond greater wholesale our an details cars source, cars sell In to was continue many them transactions seek to that engagement third the results concentrated best across to life base; drivers relentless enhancing is our that new across our one, for are in X X enhance progress CarGurus our functionalities on deliver we the consistently engagement and #X efficiently days partners, and we focus dealer key partners, ramping boost more dealer and electric we as share delivering to our now key We're dealer confident the consumer that of as transaction OEM insights in-market CarGurus offerings, efforts enhance offering adoption #X integrated business. I'll greater Provide increase value resulting proposition offer experience, our more will platform data value the on dealer among competitor. achieved lot existing advertisers value ROI on The DNA quarter, a and cycle dealers survey, products; value shoppers to is dealers third-party increasing, to next our in traditional providing online our services three, to their in target another rebuilding integrating adoption, efforts the areas: and effectively. with ROI. third our dealer our creation: versus dedicated market Nearly each. the

our launched and value-added tiers with toward greater As net a market by and by of services. Starting XX% result, search of year-over-year, the at rates, existing revenue products. higher our our one In grew allows to adoption adds subscription third inventory at driven result that listings of dealers top quarter, we pages. dealer long-standing migration products feature a major their for the promote products highlight,

initiative, With the adoption in days and and recent day functionalities model, update, update, the have to this and or many for engagement. In flexibility reports most factors supply most Insights more. have inventory released several Dealer our like variables, Since including in recent market an dealer lot, product market newest dealers increase multiple on implementing seen we've we quarters. optimize Data

the Next merchandise report, utilize eligible report. Nearly Next and Rating, half Best and maximize insights Best Deal acquisition our Rating, dealers margin in of paying insights from U.S. Deal and health over its average quarter. XXXX, observed our adjusted dealer based adjustments in our we million the during based prices have Since launch our recommendations. on last QX price on recommendation X.X XXx

and the volume deliver. Deal dealers international have to with tracking rapid also dealer Rating has introduced U.S. Last, base the of our extends to engagement early recently similarly been our seen high leads We Best beyond we we paying in partnership well Next the uptake

customers throughout We strategic, collaborating with stages more workflow. a have become partner our their of consultative

increased improved engagement, dealership our the in years. their focused conversion training handling dealers our last establish of contracts. dealers team close we who and dealers of more workflow to In resulting dedicated on with the level willingness More in-person spend than into their providing their X direct been through has dedication lead spend. To and adoption half years have more XX% better lead us and globally to has and by led on have a rates retention listings longer-term rates, higher value-added ROI to helps increased value practices products us with for spend, implement increased embedding X which fact, stronger to have during and conclude, upgrades for services best than

quarter Additionally, journey or us. of X months signed a experience. Improving priority throughout remains top approximately experience all XX% and the this buying vehicle better consumer selling contracts our a entire consumer for longer. Build were

the strides we every We to and app way. are focused an consumers needs to resonating website enhancing a quarter, past on meets This mobile consumers truly faster, making that give our step experience of that deliver website are and a to across direct and sessions owned results journey in car. seamless saw app efforts double-digit channels. more increased increase right has show find The conversion the we as our

an X.X engagement made web. Recent mobile now industry-best rated with be Our delivering search. continues an base, tool rely experience for stars a These an the search experience, and lead more make on and iOS, intuitive, relative reflect browsing updates, more upgraded that showing with of on powerful faster very conversion which nearly their with driving our leads have XX% photos options app, connecting car including user to streamlined love consumers growing submission with dedication Xx updates a in intuitive our swipeable than to is to consumers, ever. dealers along even and and in deep app

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online dealer monthly compelling unique is beyond inventory our approximately XX% presence digital grown fastest-growing largest to online. Digital are quarter-over-quarter local our and of audience, customer our continued its partners visitors transaction are widest the efficiently satisfaction. with shift and selection, more achieving a and while adoption elements nearly penetration product in average broader and strong and XX% more has to pleased we to elevated and inventory our to we network market-leading of very Deal Deal U.S. Digital than buying a XXX% enhancing proposition competitor. Enable compete the a selling nearest selling a dealer's to sourcing The continue value capabilities transactions. With we Deal, dealer nearly close on high-intent of digital expanding leads and and empower year-over-year to continue than leads XX% our as their car scale from X,XXX dealers. higher came up In Xx e-mail QX, for dealers leads. overall Digital these attract

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new exceptional intent purchase an metro and includes the to consumer manage sourcing consistency. their approximately partners nearly We remain sourcing, are in wholesale the customer prioritizing introduce solutions area leads focused shoppers. In empower on program vehicle high serve experience, powered by quarter-over-quarter. ensuring while onboarding them dealers dealer they participating intake areas believe we that with products XXX service in to ways growing needs our has XX% leveraging how matrix XX of best Offers expanded the user on technology excited dealers that to product which Top and Dealer to international receive digital tool will subscription-based to consumers training and to the to it's are We meet ready our ensure

lead given market partnering the the to tools that With is consumers streamline Marketplace this business. sourcing that develop committed within scale submit highlighting chain, dealers Over of before more XX% we the detail also of to And their key able and XX% a for are opportunity purchase of using pages part a a individuals to shoppers digital many a in vehicle the with by our are send search and will we processes new Offers to to are who synergies lead submitters in business. workflow their highlighting the rapidly. Top of XX% integrate optimized results trade-in close our ensure for page, Top I'd wholesale We we trade-in high-intent visiting of value Offers dealer vehicle, Dealer Dealer dealers. has wholesale. operations. support with digital importance for the new progress visit dealers. Rebuild like made and

within experience Our directly most empowers goal wholesale into to identify and data-driven a is execute dealers opportunities insights that delivers selling the a wholesale user decisions. market to create platform. and profitable transactions buying This

the two, operations; As reignite product previously efforts commercial are and refine market our engine. shared, execution fit to: three, one, improve underway

our that several To focused times improve with significantly to nearly been more ensure predictability over operations. In of experience unit the an profitability. provides reduced XX% our and driving have specific aim year-to-date, inventory time. a is our from maximize improved market designed extensive automate indicators real-time customer in we and and improving economics improving each create The grading are have recommendations transportation quarters, on based for our product dealer fit, intelligence, and functionalities localized reliable we fulfillment to dealer margins, leveraging a improved piloting experience enhance operations system. trends market data, by for the we insights pre-selected continue to consistency to transaction on competitive our and dealers, We effort buying our wholesale based and CarGurus' on matrix leading rules enhanced parameters, with consumer system programmatic criteria retail platform unique

closely and managers side, effective commercial preferences, Performance dealers performance using become using acquisition for the have operations. streamline build points managers disposal optimize precise best the same more optimizing inventory strategies, help needs. dealers and their inventory on to for with fulfillment work Finally, data-driven insights these vehicle fit touch our refine to

continued to pilot days, key a is early our and thoughtful our to disciplined platform. execute While greater dealers business in believe experiencing scores to investments instrumental have digital we we building our vision which transaction-enabled satisfaction revitalize better-than-average wholesale are our and remain engagement. Overall, and priorities of

proud marketplace but benefit Over the our we time, long platform dealers of strong join year-over-year EBITDA than within of suite over on as we our the the term, just basis. driving on integrated performance growth from products. To Marketplace data conclude, as we our more synergies of see at insights CarGurus are time, and CarOffer, piloting our and business are same expanding a margins value on

life offering executing platform While our creation, and through value and sustainable our on our product our laying innovation. also car innovation has By platform better transaction perform dealer are to well, and cycle. exceptionally partners focused groundwork across both growth are the continued buying for the on of we future audience selling we consumer serve enhancing drivers and to capabilities ongoing

results. Elisa to over call the to turn me discuss let Now our financial

Elisa Palazzo

commentary third our Jason, quarter. cover overview you joining of the followed by for all quarter detailed performance, thank My a Thank us fourth for today. our will you, and guidance

upgrades business well rates, continued of reflecting $XX Marketplace was products expansion Third with grew subscription adoption by dealer in quarter as year-over-year, was our Marketplace up year. Marketplace of consolidated year-over-year listings to lower strength higher versus revenue, line product partly quarter, as net our end market subscription-based the revenue which and $XXX X% third revenue and acceleration sustained million The driven high was the tiers. of value-added and range. offset $XXX at in year-over-year up guidance greater for million, XX% by volumes our business, wholesale of driven services adds by double-digit prior million

by and Revenue and revenue focus year-over-year to XX% XXX to operations dealer-to-dealer approach, third have was dealers up sequentially, transportation for XX% of with and a XX% continued our count on and efforts driven relationship the million third cars in in economics decline drives impressive dealer industry. gain we up a quarter. share growth year-over-year, paying as customer-centric unit market and we quarter international this partners. The retention in This global base dealer continued long-term X% engagement the which X% down is down up consolidating Our reflection was our fosters business our transaction our Wholesale year-over-year, customer was were request, by improving of a as and volume, dealer driven our $XX in quarter, continue which respectively. expansion optimize experience. and

fourth the Lastly, our XX% sequentially. product to second the third favorable revenue in partners. October, saw was third the quarter. $XX to related below slightly stronger million Volumes be and to up one due quarter of quarter, have expect we market volumes XX% year-over-year down origination quarter normalized conditions but in for activity We

a volumes outsized and our now profit have our a on on will As on a an minor profitability expenses impact non-GAAP reminder, but discuss EBITDA. I basis. impact cars and revenue gross

reflecting and $XXX business. driven operating non-GAAP lower flow-through year-over-year. non-GAAP million, high Consolidated margin XX% gross sequential and mix basis non-GAAP while XXX flat the in towards margins. gross our Third continued adjusted million, while to margin was mix EBITDA we quarter XX% wholesale and driven consolidated to revenue expanded profit year-over-year XX% wholesale XX% approximately OEM year-over-year Marketplace favorable gross cost $X.X was margin. transport up gross about and and was XX%, to drove meaningful margin margin sequentially in accelerate. Non-GAAP better cost our by year-over-year, expansion approximately year-over-year $XX.X up sequential our margin Digital The in adjusted marketplace business, non-GAAP non-GAAP base, improvement basis sequentially. year-over-year volume million year revenue sequentially, gross prior base improvement profit by XXX margin. Consolidated revenue. In EBITDA was growth adjusted points XXX non-GAAP year-over-year. adjusted advertising approximately leverage a gained up and due approximately $XX grew loss was continues Marketplace Marketplace quarter basis higher primarily the high-margin gross reflected was across shift ongoing up XX% million, product cost modest product improved as up gross revenue higher EBITDA EBITDA gross by XX%, from profit points points to and optimization, momentum the unit and higher was XX% economics

base. OpEx leverage Third seasonal our with fluctuations consistent up with $XXX continue to million, expenses highlighting and flat initial ability year-over-year cost cost totaled operating our and the quarter to are non-GAAP guidance X% within in fixed our sequentially, line trends year.

we our based booked we and revenue are criteria, financials, periodically quarter, in initiatives our $XX.X the million source discontinuation in assess our purchase of is under on Buy invested allocation and related expenses. We site. During impairment ensure million $X.X dealers recognized to to charge the strategic execution market fits charge $X CG that a a pilot, that under GAAP to allowed returns, noncash operating wholesale demands. digital cost one of number of capital our we segment vehicles on consumers and Online our capabilities reflected million This base including financial the of optimizing end

review discontinue growth not This exemplified Although to CG and after our Online Digital we to growth Offers. to in affect Buy decided commitment platform to did careful transaction-enabled decision Dealer as resources initiatives. Deal, going by build and and Top forward a our other innovation continue redeploy internally,

net The for adjusted consolidated third end to $X.XX second Non-GAAP cash by share or was the from higher year-end. count. We related We common and rest we the $XX by CapEx an into capitalized in headquarters the driven quarter, be shareholders the share and of tenant for related in cash minimal to the XX% increase $XX approximately the offset moved balance Now the cash $XX.X $X.XX by improvement earnings non-GAAP partly EBITDA in items. to September expect outlays primarily back million allowance net equivalents, million of with and third for diluted ended per costs at new was build-out and quarter. construction in up income, increase be new lower quarterly of million the year-over-year, cash the $XXX quarter and year, other end of of the of our cash and attributable to part diluted completed to reflecting the our results. million flow headquarters

purchase $X.X for quarter, third repurchased XXX,XXX million. shares the of During aggregate an price we

repurchases a shares As XX, had for program. million under of $XXX approximately of XXXX in total the million of September XXXX, $XXX we remaining worth repurchased and available share

into our remarks will I'm a to effective the our authorized program for commitment that Board This year. my share guidance shareholders. I value $XXX our to return our strong with outlook to generation now close pleased share flow has we and the January cash continue quarter. expect million repurchase fourth XXXX, Additionally, highlights as prepared new to

of revenue X% expect be We $XXX in the our to year-over-year, to $XXX million, range million down up quarter respectively. fourth X% consolidated and

of the continue XX% and has driven strong quarter, results momentum to a XXXX marketplace perform up $XXX business by the bookings the advertising. Comparable our continued of million will be to period $XXX growth and XX% as expect range into revenue in We year difficult we year-over-year, to in lapping in our growth. expected start million, increasingly and well, continued business between get double-digit in fourth OEM to with

previously, As at dollar revenue than we expansion in terms rather percentage mentioned points. look

wholesale. Moving digital to

fourth the typically in quarter expect sequentially is activity wholesale fourth decline as volumes quarter. We to slower

in quarter, range lower further million. to in media driven $XX and fourth we the during holiday consolidated operating EBITDA by leverage $XX be segment, fourth the non-GAAP our season. expect In spend million expect continued of adjusted margin quarter We expansion Marketplace the the

fourth following a quarter, first As the we in typically quarter. up in the seasonal significantly reduction reminder, spend marketing ramp the

lower segment we a wholesale, expect by modestly unit on offset partly digital to economics, sequential improve better due to basis volumes. For EBITDA losses

And diluted Q&A. million. With we XXX Finally, outstanding fourth earnings the to approximately of average to per be to weighted the for be let's that, expect in shares non-GAAP open quarter common $X.XX. $X.XX share range call

Operator

will from BTIG. question of our Marvin And Instructions] come Fong [Operator first

Marvin Fong

of in cash. about marketplace the a just Congratulations the Could business on how the update us kind thinking core start, kind like especially of I just throwing quarter. clearly, and brand. Yes, investing is of doing you're lot to on you well, the up very

should think of back next marketing to and brand we brand But bit some awareness then would flywheel just about leaning of campaigns. like various consumer dive a more you think effect little kind more second there. And I you a year, generate construction decision discontinue the deeper didn't to it work. Online? is there on some any dealer that into product, Just CG of to the amount acceptance certain Was about you or color Buy the like other something saw it seem into what had create more going possibly to question, was factors? kind or love there

Jason Trevisan

Thanks, I'll Marvin. take first one. This the Jason. is

So more is from marketing it. a brand in perspective heard and that I remarks to you broadly perspective, would say Elisa's seasonality there

can you at so And expect new increase an the year.

capturing We shopping of audience are advertising their and more and parts with funnel, of our to more journey. we about marketing speak, our the different getting think as so at sophisticated bigger

historically number have ways supported funnel, you That's our of And that keeps our We to or portfolio which in the brand our remarks, the experience also grow lot awareness. we're mid-funnel of heard low user brand a growing. funnel to fact site. very our go on a also been effort and and is the by oriented and in prepared higher that's product complemented improving

about. And by lastly, channels we we're time. number the really new And that channels message, it's I'd of but then user new the to actually excited a so just a out product in the we're found with some not experience all success pump advertising it's itself. And supported say trying brand

as not a try that going in we're as so as can to brand focused as we best build to handful continue of and So to performance we're quickly channels.

Elisa Palazzo

financial the take part we'll of now Buy And Online. CG Yes.

very So a Marvin, we capital have allocation process and disciplined approach.

to opportunities financial way number strategic including fits, a undergo our criteria, periodically end and in capital a of on review differentiated a we base. so we And returns, based invested ability of our demands. assess And market execute

the redeploy projects. concluded so was CG us other quarter, it in consideration detailed Online that analysis, very resources careful the appropriate after third Buy And a pilots of to for and to we

Operator

question JMP nExt Nick comes from Jones of The Securities. Citizens

Nicholas Jones

Great. X around just I Car guess Spend.

growth that's inflation? a what new you adopting maybe Do speak bps you there way annually folks about to certain XXX about the pipeline you should the driving [One Is to can of also think we Spend pipeline? is kind of do how and feel inflation? kind things can we taking to time, algorithm to as think enough a product aren't it drive guess, Can mean you maybe you product XXX, above continue still follow-up], rates here? as to Car a I I over products? As there take quickly? extent robust that over mechanism attach of the have to relates amount part time? price a maybe to introduce like keep And up maybe

Elisa Palazzo

Thank you, Nick.

growth comment are the will pipeline So I on we the that seeing at moment.

of good So durable. as our This into very the we to we are grow, drivers and said, about comps difficult performs are the going quality well continues the feel business expansion to get more XXXX. of as growth that believe

use our frequently. They So more products seeing dealer of are and engagement. more higher we

And us. are with so of their spend level they increasing

products of daily dealers better services We basis. are adoption higher that and seeing really on help a run their and value-added business insights data

and retention so prevalent. this And more contracts stronger is also resulting becoming in long-term

XXXX, even do and to Sam or be we comment to in growth to into strong And further expect products. visibility expect so we don't if the on that have on we pipeline. accelerate Jason business maybe -- And the wanted growth

Jason Trevisan

standpoint, pack more Sure. know, buckets, our our upsell think you value to would higher-tier features And and and packages. more about cross-sells products of perspective, in Nick, it into From We, pipeline. standpoint. a it's really product as I do Jason. and feel features. From and it's continue a upsells an from both product good we X

lot marketing how more our what introduced just is data that's that, run dealers products marketplace around inform but we're them than to exciting that and and more a dealerships, that ever-improving they site already is we'll a I leveraging aspects can So off-site workflow introduce things dealer and cross-sell perspective, marketing. even data those there's channels of to starting think beyond and as we're their more more though, help new insights to exposure brand in as our other on have marketing and well. From we continue of with

Top now it so as more in they that But and and so includes then we also Offer better. And and selling marketing can leads their around with pricing, stretching so them is more workflow forth. CarOffer deliver that sourcing insights around also early as and Dealer clearly, that convert even the merchandising,

of our so for different that well. and those in And the workflow, we're getting opens features opportunities their to introduce door there aspects us in up as as products new foot

Operator

next The Gupta of comes JPMorgan. Rajat from question

Rajat Gupta

count, could The in if you Great. the you sequential quick about of in up think speak initiatives good the give on ones there? more on went to accelerate little I should I if dealer the growth follow-up. trajectory? can company Pretty business. what that more of would have growth know And had there's in? noticed leaning OpEx innings just to the And that a the more you I marketing don't say into Cars there as a improvement than maybe also just well is couple a revenue at international we growth be as How region bit well would helpful. sequentially. one Any the I as color

Samuel Zales

the adoption in of in no front. growing the big I'll international that proud proud to point we're We're we really U.S., and bottom price be very the couldn't the adding we us, Zales. playbook And the -- which gain customer minimis. of part in and know is line. the following fast, at longer because where of dealers it's U.K. winning their we're businesses, go a we adaptive, we versus Rajat, first market results are are on and competitors from both acquisitions. of are large it's de the that -- for more and take that's Canada Sam our We the businesses profitable These question.

are can in playbook same international that from the You those numbers up then QARSD the QARSD of markets. And new dealer The following going we're counts in see tremendously growth of growth. factors comes new who to in dealers at doing our business ABR packages, that right premium our dealers price cross-selling those to coming those underpriced. them for points, then process the and upselling products

U.S. digital able And consumers are into motions the drive of down want and dealers those some launched. funnel and with growth in those your then many funnel. in high-value launched financial So products setting. actions of both we or rate information market can close retention Rating, dealer to the those first and in dealers which effectively and we consumers more that in data coming launched those your differentiated our market some about to being that are the markets. And all high be to effectively. tremendous Think appointment that price of then with, saying profit And Deal platform, Best trade information deal working leads business offering Canada the a maximization insights cases, to to are in the those the down dealers use heard transact-enabled the close customers. providing a either of is you -- are that driving just of Next platform, tremendously better customers for you for

and profitability driving So both revenue us, with growth, the our tools all those at rates those in of we're that's for and the growth both QARSD growth in and markets, of finding retention customer markets. new customers record

Elisa Palazzo

OpEx, the into the should next this to related And a sales the which step in up quarter. normalize causing we to It going quarter. Canada, tax OpEx is Rajat, one-off on have

are in traffic We of seeing lot of traction gains. terms a share

And also investing business. are the so in international we

Rajat Gupta

customers the tax as mix? of maybe of dealer on you Got I franchise it. in just indicated on available on count monetization impact. it. Could just gradually just the clear opportunities platform. And incremental or past, trended higher your is the that opportunity any on has marketplace maybe That's fruit the the the terms transformed with the and dealer low-hanging think elaborate you've then Got manufacturers in mix

Samuel Zales

Sam, We've moving for of all growth dealer segments dealer I'm the had well tremendous globally QARSD or strong in been the about. you're some arena the -- focused, assuming heard are and it's the count, but that led driven on growth U.S., you've talking us. U.S. of franchise we've that's Rajat, really

who consumers searching offer consumers vehicle, market You than both market. have to of for dealers the small $X,XXX the of we set those our success. competitors for know we in dealer's are that that serve And broader we inventory to and a our want for any consumers because $X,XXX or our

those the net adds wallet market. dealers more market And see both segments us, share, dealer QARSD taking us. more of of but and And and plus share. us and you wallet than all the independent successful both the and been and have share is franchise, having customers larger rest both more winning So for have for successful been faster that growing franchise doing

for this and about you coming on growth. customer double-digit down-funnel the to see vehicles, and comes car also is to in shoppers You quarters' growth the supply OEM new ICE base turning it because work EVs the really both the Days And is It worth nice is X market platform asked arena. to our That's business. they're for. best advertising see lengthening. comes back of saying, one in --

their brands advertising, we highly And and in so focused always couple of both of years market. the be really profitable been the we've on proud leads import for but advertising have last investments than We'll back the domestic slow business when more have. we're won

dealers. those of a lead generation OEM some relationships drive program And their for

and really synergistic opportunity so for of we're that it's win-win proud And a us and growth.

Operator

Research comes from of Huber Doug Arthur question next Partners. The

Douglas Arthur

This asked But question may already. the that pretty new penetration, last the that in stout Jason, think value a in are products, have et deal or are at going tough Or drive the comparison a really there? to comp confident face QARSD numbers obviously, QARSD you for about a rate? the you for been you will terrific When added, quarters. to been XXXX, different continue cetera, form digital the X X have the in slightly

Jason Trevisan

you drivers tick no in see just say, Elisa quickly Sure. But I 'XX. at I I'll Well, look heard tougher of question, as QARSD, we if through have that -- and do you examples. mean, the some comps, you think

really any ceiling successful don't pack much value a higher move that see an dealers those have to You have in to we going they That's on that imminent robust they our continue insights up when able insights. tiers access to way. have because we that more platform The they into more be are to with to entice on. really pipeline

is unlimited are insights have addition marketing, just that there. Other of kind so I other And because not some we few and to in past. lived to of spoke is Lead a in just about we cross-sell can span just minutes more terms that the adding which limited workflows of ago start across dealer we've quality those to than opportunities while in keep lead probably underestimated is quantity, where in rather the I that to dealers sure exact an lead and the is lot think, are quality, dealers -- so a on. that at at work factor but focus we really of looking hard for of making attribution, a quality that lot the better that measure it's better is hard very ROI dealers. products, quality And for QARSD

be can So with that more excited investing us. they about

we're that So QARSD. levers ensuring It's these different great a of deliver focused on we very ROI. on predicated

we're never talk surveys over skis our going about even that that. validated And heard get more on so that. to And us you

that And we're so we as pretty in feel we will runway ROI have a long good as QARSD. focused,

Operator

The Spak next comes from Joseph question of UBS.

Zachary Walljasper

for on Walljasper Joe Zach It's Spak today.

had So X I quick questions.

do and Or customers? is especially And about XX that? Or of assess aspect? at one of is seeing to signing X how comment activity the kind are health how Like in then -- opportunity of earlier like is think work business, would it days the end? at there How like just you're contracts, we the your seasonal of a ago, on quick months. pricing Versus in the the kind does linear, the do about kind it your kind customers longer-term price dealer of follow-up. is, middle? you we a So like consumer

Samuel Zales

you the try we've the in our way at more to think and Zach, that take with look our the lead business that had chosen need it now And we growing price far in the #X to closest that probe want we're customers. I for customers of that with we're one. dealer I'll thoughts and value gives almost survey extensive it's with on drive [indiscernible] for market And leverage. our might Jason, our leads the provider Pricing we Zales. the quality going producing Xx in to the works can and then competitor. that, and from you and that experience by first over Sam weigh market to years of assess in consumer. that saying a reference ROI more volume

So we've can that It's looking close been It's our and rate to volume their and point not dealer. leads of based we at close the expected for drives those dealers. the had knowing seasonally inventory think we've known we the that what rate drive we're on what as the based. has success rates, and price

because price market as point. QARSD right in point numbers, we in we've those moving at are So first price and the right the higher the grows dealers said, in bring all direction. a

and heard that's dealers time, us And over our you've time. reviews, our ABRs, raising who annual those so over the were business about taking underpriced the talk against market

doing we're front, on So QARSD as really proud growth. that we're to driven what that's that

on the choice. dealers And quarter. sales. You about rates the hope partly at previously, largest know know and is that hope end quarter and biggest of longer down for But a market and used retail the lots dealers in down market industry typically typically saying, of came because the when is rates the funnel in leads sales know We on our the asked saw that weakest first still terms it consumer wholesale to car fastest is because, quarters your a hard X vehicle of in continue more we help be very third is interest market. QX stronger way sell, time interesting. most than the turn get demand, That's the us I has biggest the product, a of think audience, to quality the that it's first I inventory audience CarGurus and those I We used our quantity dealer best will question. interest makes the we was used down quarter be the in have the that to sitting marketplace, bit stronger. for the will times, success ROI and the I my was answered are hope in to we to to weak, the little program. and that so community. third consumers

Operator

the turn over Jason for to like would call any I session. question-and-answer to remarks. Trevisan closing our concludes This

Jason Trevisan

always, much. results. outstanding has want and at hope of a very joining I our just you us I We'd to And to thank and dedication thank everyone all colleagues for everyone evening. your these evening. Thank this passion as CarGurus nice like for

Operator

conference presentation, and disconnect. today's for may The Thank now you has concluded. attending you now

CarGurus (CARG) 7 Nov 242024 Q3 Earnings call transcript