CarGurus Announces Second Quarter 2021 Results
Second Quarter Highlights:
- Total revenue of
$217.7 million , an increase of 130% year-over-year - GAAP operating income of
$38.5 million ; non-GAAP operating income of$68.9 million - GAAP consolidated net income of
$27.4 million ; non-GAAP consolidated net income of$53.8 million - GAAP net income attributable to common stockholders of
$28.1 million ; non-GAAP net income attributable to common stockholders of$49.5 million - Cash, cash equivalents and short-term investments of
$269.6 million - Adjusted EBITDA of
$66.4 million
“I’m thrilled to report that
Revenue
- Total revenue was
$217.7 million , an increase of 130% compared to$94.7 million in the second quarter of 2020. - Marketplace subscription revenue was
$144.2 million , an increase of 80% compared to$80.0 million in the second quarter of 2020. - Other revenue was
$73.5 million , an increase of 397% compared to$14.8 million in the second quarter of 2020.
Operating Income
- GAAP operating income was
$38.5 million , or 18% of total revenue, compared to$8.7 million , or 9% of total revenue, in the second quarter of 2020. - Non-GAAP operating income was
$68.9 million , or 32% of total revenue, compared to$24.7 million , or 26% of total revenue, in the second quarter of 2020.
Consolidated Net Income, Net Income Attributable to Common Stockholders & Adjusted EBITDA
- GAAP consolidated net income was
$27.4 million during the second quarter endedJune 30, 2021 , compared to$7.1 million during the second quarter endedJune 30, 2020 . - Non-GAAP consolidated net income was
$53.8 million during the second quarter endedJune 30, 2021 , compared to$21.3 million during the second quarter endedJune 30, 2020 . - GAAP net income attributable to common stockholders was
$28.1 million , or$0.23 per fully diluted share, during the second quarter endedJune 30, 2021 , compared to$7.1 million , or$0.06 per fully diluted share, during the second quarter endedJune 30, 2020 . - Non-GAAP net income attributable to common stockholders was
$49.5 million , or$0.41 per fully diluted share, during the second quarter endedJune 30, 2021 , compared to$21.3 million , or$0.19 per fully diluted share, during the second quarter endedJune 30, 2020 . - Adjusted EBITDA, a non-GAAP metric, was
$66.4 million for the second quarter endedJune 30, 2021 , compared to$27.5 million for the second quarter endedJune 30, 2020 .
Balance Sheet and Cash Flow
- As of
June 30, 2021 ,CarGurus had cash, cash equivalents and short-term investments of$269.6 million and no debt. CarGurus generated$37.5 million in cash from operations and$32.9 million in free cash flow, a non-GAAP metric, during the second quarter of 2021, compared to having generated$24.8 million in cash from operations and$22.4 million in free cash flow during the second quarter of 2020.
Second Quarter Business Metrics(1)
U.S. revenue was$206.6 million in the second quarter of 2021, an increase of 130% compared to$89.7 million in the second quarter of 2020.U.S. marketplace subscription revenue was$134.1 million in the second quarter of 2021, an increase of 78% compared to$75.5 million in the second quarter of 2020. GAAP operating income in theU.S. was$40.2 million , an increase of 162% compared to$15.3 million in the second quarter of 2020.- International revenue was
$11.2 million in the second quarter of 2021, an increase of 124% compared to$5.0 million in the second quarter of 2020. International marketplace subscription revenue was$10.2 million in the second quarter of 2021, an increase of 126% compared to$4.5 million in the second quarter of 2020. GAAP operating loss in International markets was($1.7) million , a reduction in loss of 74% compared to a loss of($6.6) million in the second quarter of 2020. - Total paying dealers were 30,727 at
June 30, 2021 , an increase of 2% compared to 30,258 atJune 30, 2020 . Of the total paying dealers atJune 30, 2021 ,U.S. and International accounted for 23,950 and 6,777, respectively, compared to 23,806 and 6,452, respectively, atJune 30, 2020 . - Quarterly Average Revenue per Subscribing Dealer (“QARSD”) in the
U.S. was$5,550 as ofJune 30, 2021 , an increase of 82% compared to$3,047 as ofJune 30, 2020 . - QARSD in International markets was
$1,491 as ofJune 30, 2021 , an increase of 132% compared to$643 as ofJune 30, 2020 . - Website traffic and consumer engagement metrics for the second quarter of 2021 were as follows:
U.S. average monthly unique users were 32.8 million, a decrease of (4%) compared to 34.1 million in the second quarter of 2020.U.S. average monthly sessions were 81.1 million, a decrease of (6%) compared to 85.9 million in the second quarter of 2020.- International average monthly unique users were 7.8 million for both the second quarter of 2021 and 2020. International average monthly sessions were 18.0 million, an increase of 4% compared to 17.4 million in the second quarter of 2020.
(1) CarOffer is excluded from the metrics presented for paying dealers, QARSD, users and sessions.
Third Quarter 2021 Guidance
• Total revenue | |
• Non-GAAP operating income | |
• Non-GAAP EPS |
The third quarter 2021 non-GAAP earnings per share calculation assumes 120.1 million diluted weighted-average common shares outstanding.
The assumptions that are built into guidance for the third quarter 2021 regarding our pace of paid dealer acquisition, churn, and expansion activity for the relevant period are based on recent market behaviors and industry conditions. Guidance for the third quarter 2021 excludes the effects of significant COVID-19 resurgences, including the reintroduction of lockdowns and/or a slowed pace of recovery, or other macro-level industry issues that result in dealers and consumers materially changing their recent market behaviors or that cause us to enact additional measures to assist dealers, such as offering further fee reductions or waivers. Guidance also excludes the potential impact of transactions related to CarGurus’ Instant
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Cautionary Language Concerning Forward-Looking Statements
This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our future financial and business performance for the third quarter 2021, our ability to become a fully integrated solution and unlock a truly differentiated offering for consumers and dealers, our belief that the presentation of non-GAAP financial measures and other business metrics is helpful to our investors, our business and strategy and the impact of the COVID-19 pandemic and other macro-level issues on our industry, business and financial results, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “guide,” “intend,” “likely,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our growth and ability to grow our revenue, our relationships with dealers, competition in the markets in which we operate, market growth, our ability to innovate, our ability to realize benefits from our acquisitions and successfully implement the integration strategies in connection therewith, natural disasters, epidemics or pandemics, like COVID-19 that has negatively impacted our business, our ability to operate in compliance with applicable laws, as well as other risks and uncertainties as may be detailed from time to time in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other reports we file with the
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
At 2021 |
At 2020 |
||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 184,642 | $ | 190,299 | |||
Investments | 85,000 | 100,000 | |||||
Accounts receivable, net of allowance for doubtful accounts of |
81,863 | 18,235 | |||||
Prepaid expenses, prepaid income taxes and other current assets | 17,737 | 12,385 | |||||
Deferred contract costs | 10,554 | 10,807 | |||||
Restricted cash | 8,980 | 250 | |||||
Total current assets | 388,776 | 331,976 | |||||
Property and equipment, net | 31,641 | 27,483 | |||||
Intangible assets, net | 100,348 | 10,862 | |||||
156,098 | 29,129 | ||||||
Operating lease right-of-use assets | 67,024 | 60,835 | |||||
Restricted cash | 10,377 | 10,377 | |||||
Deferred tax assets | 17,446 | 19,774 | |||||
Deferred contract costs, net of current portion | 8,034 | 9,189 | |||||
Other non-current assets | 4,461 | 2,673 | |||||
Total assets | $ | 784,205 | $ | 502,298 | |||
Liabilities, redeemable noncontrolling interest and stockholders’ equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 45,877 | $ | 21,563 | |||
Accrued expenses, accrued income taxes and other current liabilities | 33,394 | 24,751 | |||||
Deferred revenue | 13,120 | 9,137 | |||||
Operating lease liabilities | 11,156 | 11,085 | |||||
Total current liabilities | 103,547 | 66,536 | |||||
Operating lease liabilities | 64,723 | 58,810 | |||||
Deferred tax liabilities | 291 | 291 | |||||
Other non–current liabilities | 11,898 | 3,075 | |||||
Total liabilities | 180,459 | 128,712 | |||||
Redeemable noncontrolling interest | 54,565 | — | |||||
Stockholders’ equity: | |||||||
Preferred stock, |
— | — | |||||
Class A common stock, |
99 | 94 | |||||
Class B common stock, |
18 | 19 | |||||
Additional paid-in capital | 368,194 | 242,181 | |||||
Retained earnings | 179,825 | 129,412 | |||||
Accumulated other comprehensive income | 1,045 | 1,880 | |||||
Total stockholders’ equity | 549,181 | 373,586 | |||||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ | 784,205 | $ | 502,298 |
Unaudited Condensed Consolidated Income Statements
(in thousands, except share and per share data)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 217,748 | $ | 94,737 | $ | 389,116 | $ | 252,426 | |||||||
Cost of revenue(1) | 50,317 | 9,880 | 74,375 | 21,490 | |||||||||||
Gross profit | 167,431 | 84,857 | 314,741 | 230,936 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 66,135 | 38,583 | 134,309 | 132,178 | |||||||||||
Product, technology, and development | 27,630 | 21,887 | 52,794 | 44,971 | |||||||||||
General and administrative | 26,167 | 14,158 | 46,681 | 30,018 | |||||||||||
Depreciation and amortization | 9,022 | 1,520 | 16,689 | 3,041 | |||||||||||
Total operating expenses | 128,954 | 76,148 | 250,473 | 210,208 | |||||||||||
Income from operations | 38,477 | 8,709 | 64,268 | 20,728 | |||||||||||
Other income, net | 61 | 474 | 283 | 1,202 | |||||||||||
Income before income taxes | 38,538 | 9,183 | 64,551 | 21,930 | |||||||||||
Provision for income taxes | 11,142 | 2,052 | 17,604 | 2,103 | |||||||||||
Consolidated net income | 27,396 | 7,131 | 46,947 | 19,827 | |||||||||||
Net loss attributable to redeemable noncontrolling interest | (656 | ) | — | (3,466 | ) | — | |||||||||
Net income attributable to common stockholders | $ | 28,052 | $ | 7,131 | $ | 50,413 | $ | 19,827 | |||||||
Net income per share attributable to common stockholders: | |||||||||||||||
Basic | $ | 0.24 | $ | 0.06 | $ | 0.43 | $ | 0.18 | |||||||
Diluted | $ | 0.23 | $ | 0.06 | $ | 0.42 | $ | 0.17 | |||||||
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders: | |||||||||||||||
Basic | 117,124,895 | 112,734,393 | 116,722,913 | 112,544,743 | |||||||||||
Diluted | 119,454,104 | 113,737,465 | 118,353,969 | 113,947,241 | |||||||||||
(1) Includes depreciation and amortization expense for the three months ended |
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Operating Activities | |||||||||||||||
Consolidated net income | $ | 27,396 | $ | 7,131 | $ | 46,947 | $ | 19,827 | |||||||
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 10,165 | 3,357 | 18,831 | 6,347 | |||||||||||
Currency loss (gain) on foreign denominated transactions | 21 | 11 | (30 | ) | (91 | ) | |||||||||
Deferred taxes | 2,276 | (769 | ) | 2,336 | 4,695 | ||||||||||
Provision for doubtful accounts | 71 | 456 | 450 | 1,658 | |||||||||||
Stock-based compensation expense | 14,387 | 11,769 | 28,747 | 23,375 | |||||||||||
Amortization of deferred contract costs | 3,259 | 2,805 | 6,454 | 5,641 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable, net | (45,559 | ) | 252 | (47,982 | ) | 5,653 | |||||||||
Prepaid expenses, prepaid income taxes, and other assets | (1,801 | ) | 13,882 | (4,018 | ) | 2,835 | |||||||||
Deferred contract costs | (1,604 | ) | (778 | ) | (5,098 | ) | (4,074 | ) | |||||||
Accounts payable | 10,457 | (18,477 | ) | 15,333 | (25,914 | ) | |||||||||
Accrued expenses, accrued income taxes, and other liabilities | 17,212 | 379 | 15,580 | (4,134 | ) | ||||||||||
Deferred revenue | 1,132 | 3,150 | 3,989 | (1,788 | ) | ||||||||||
Lease obligations | 61 | 1,619 | (204 | ) | 898 | ||||||||||
Net cash provided by operating activities | 37,473 | 24,787 | 81,335 | 34,928 | |||||||||||
Investing Activities | |||||||||||||||
Purchases of property and equipment | (3,445 | ) | (1,357 | ) | (4,672 | ) | (2,571 | ) | |||||||
Capitalization of website development costs | (1,143 | ) | (1,029 | ) | (2,109 | ) | (1,695 | ) | |||||||
Cash paid for acquisitions, net of cash acquired | 1,626 | — | (64,273 | ) | (21,004 | ) | |||||||||
Investments in certificates of deposit | (45,000 | ) | — | (45,000 | ) | — | |||||||||
Maturities of certificates of deposit | 60,000 | 38,281 | 60,000 | 68,692 | |||||||||||
Net cash provided by (used in) investing activities | 12,038 | 35,895 | (56,054 | ) | 43,422 | ||||||||||
Financing Activities | |||||||||||||||
Proceeds from exercise of stock options | 140 | 415 | 398 | 929 | |||||||||||
Payment of finance lease obligations | (3 | ) | (9 | ) | (13 | ) | (18 | ) | |||||||
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options | (3,167 | ) | (2,389 | ) | (8,208 | ) | (5,786 | ) | |||||||
Repayment of line of credit | — | — | (14,250 | ) | — | ||||||||||
Net cash used in financing activities | (3,030 | ) | (1,983 | ) | (22,073 | ) | (4,875 | ) | |||||||
Impact of foreign currency on cash, cash equivalents, and restricted cash | (16 | ) | 52 | (135 | ) | 24 | |||||||||
Net increase in cash, cash equivalents, and restricted cash | 46,465 | 58,751 | 3,073 | 73,499 | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 157,534 | 85,471 | 200,926 | 70,723 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 203,999 | $ | 144,222 | $ | 203,999 | $ | 144,222 |
Unaudited Reconciliation of Marketplace Subscription Revenue
(in thousands)
Three Months Ended | Six Months Ended | |||||||||||||||
Marketplace Subscription Revenue: | 2021 | 2020 | 2021 | 2020 | ||||||||||||
$ | 134,088 | $ | 75,457 | $ | 266,116 | $ | 208,481 | |||||||||
International | 10,152 | 4,496 | 17,689 | 13,338 | ||||||||||||
Total | $ | 144,240 | $ | 79,953 | $ | 283,805 | $ | 221,819 |
Unaudited Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and GAAP Operating Margin to Non-GAAP Operating Margin
(in thousands, except percentages)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
GAAP operating income | $ | 38,477 | $ | 8,709 | $ | 64,268 | $ | 20,728 | |||||||
Stock-based compensation expense | 22,540 | 11,923 | 37,933 | 23,604 | |||||||||||
Amortization of intangible assets | 7,858 | 485 | 14,504 | 917 | |||||||||||
Acquisition-related expenses | 65 | 24 | 709 | 968 | |||||||||||
Restructuring expenses(1) | — | 3,514 | — | 3,514 | |||||||||||
Non-GAAP operating income | $ | 68,940 | $ | 24,655 | $ | 117,414 | $ | 49,731 | |||||||
GAAP operating margin | 18 | % | 9 | % | 17 | % | 8 | % | |||||||
Non-GAAP operating margin | 32 | % | 26 | % | 30 | % | 20 | % | |||||||
(1) Excludes stock-based compensation expense of |
Unaudited Reconciliation of GAAP Consolidated Net Income to Non-GAAP Net Income Attributable to Common Stockholders
(in thousands, except per share data)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
GAAP consolidated net income | $ | 27,396 | $ | 7,131 | $ | 46,947 | $ | 19,827 | |||||||
Stock-based compensation expense, net of tax(1) | 17,807 | 9,419 | 29,967 | 18,647 | |||||||||||
Change in tax provision from stock-based compensation expense(2) | 676 | 747 | 623 | (486 | ) | ||||||||||
Amortization of intangible assets | 7,858 | 485 | 14,504 | 917 | |||||||||||
Acquisition-related expenses | 65 | 24 | 709 | 968 | |||||||||||
Restructuring expenses(3) | — | 3,514 | — | 3,514 | |||||||||||
Non-GAAP consolidated net income | 53,802 | 21,320 | 92,750 | 43,387 | |||||||||||
Net income attributable to redeemable noncontrolling interest | (4,264 | ) | — | (4,139 | ) | — | |||||||||
Non-GAAP net income attributable to common stockholders | $ | 49,538 | $ | 21,320 | $ | 88,611 | $ | 43,387 | |||||||
Non-GAAP net income per share attributable to common stockholders: | |||||||||||||||
Basic | $ | 0.42 | $ | 0.19 | $ | 0.76 | $ | 0.39 | |||||||
Diluted | $ | 0.41 | $ | 0.19 | $ | 0.75 | $ | 0.38 | |||||||
Shares used in non-GAAP per share calculations | |||||||||||||||
Basic | 117,125 | 112,734 | 116,723 | 112,545 | |||||||||||
Diluted | 119,454 | 113,737 | 118,354 | 113,947 | |||||||||||
(1) The stock-based compensation amounts reflected in the table above are tax effected at the |
|||||||||||||||
(2) This adjustment reflects the tax effect of differences between tax deductions related to stock compensation and the corresponding financial statement expense. | |||||||||||||||
(3) Excludes stock-based compensation expense related to the Expense Reduction Plan of |
Unaudited Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Profit Margin to Non-GAAP Gross Profit Margin
(in thousands, except percentages)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 217,748 | $ | 94,737 | $ | 389,116 | $ | 252,426 | |||||||
Cost of revenue | 50,317 | 9,880 | 74,375 | 21,490 | |||||||||||
Gross profit | 167,431 | 84,857 | 314,741 | 230,936 | |||||||||||
Stock-based compensation expense included in Cost of revenue | 109 | 85 | 201 | 184 | |||||||||||
Acquisition-related expenses included in Cost of revenue | — | — | — | 22 | |||||||||||
Restructuring expenses included in Cost of revenue | — | 1,051 | — | 1,051 | |||||||||||
Non-GAAP gross profit | $ | 167,540 | $ | 85,993 | $ | 314,942 | $ | 232,193 | |||||||
GAAP gross profit margin | 77 | % | 90 | % | 81 | % | 91 | % | |||||||
Non-GAAP gross profit margin | 77 | % | 91 | % | 81 | % | 92 | % |
Unaudited Reconciliation of GAAP Expense to Non-GAAP Expense
(in thousands)
Three Months Ended |
||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP expense |
Stock-based compensation expense |
Amortization of intangible assets |
Acquisition-related expenses | Restructuring expenses(3) | Non-GAAP expense |
GAAP expense | Stock-based compensation expense |
Amortization of intangible assets |
Acquisition-related expenses | Restructuring expenses(3) | Non-GAAP expense |
|||||||||||||||||||||||||||||||||||||
Cost of revenue | $ | 50,317 | $ | (109 | ) | $ | — | $ | — | $ | — | $ | 50,208 | $ | 9,880 | $ | (85 | ) | $ | — | $ | — | $ | (1,051 | ) | $ | 8,744 | |||||||||||||||||||||
S&M | 66,135 | (3,571 | ) | — | — | — | 62,564 | 38,583 | (3,064 | ) | — | — | (1,668 | ) | 33,851 | |||||||||||||||||||||||||||||||||
P,T&D(1) | 27,630 | (6,230 | ) | — | — | — | 21,400 | 21,887 | (5,316 | ) | — | — | (679 | ) | 15,892 | |||||||||||||||||||||||||||||||||
G&A | 26,167 | (12,630 | ) | — | (65 | ) | — | 13,472 | 14,158 | (3,458 | ) | — | (24 | ) | (116 | ) | 10,560 | |||||||||||||||||||||||||||||||
Depreciation & amortization | 9,022 | — | (7,858 | ) | — | — | 1,164 | 1,520 | — | (485 | ) | — | — | 1,035 | ||||||||||||||||||||||||||||||||||
Operating expenses(2) | $ | 128,954 | $ | (22,431 | ) | $ | (7,858 | ) | $ | (65 | ) | $ | — | $ | 98,600 | $ | 76,148 | $ | (11,838 | ) | $ | (485 | ) | $ | (24 | ) | $ | (2,463 | ) | 61,338 | ||||||||||||||||||
Total expenses | $ | 179,271 | $ | (22,540 | ) | $ | (7,858 | ) | $ | (65 | ) | $ | — | $ | 148,808 | $ | 86,028 | $ | (11,923 | ) | $ | (485 | ) | $ | (24 | ) | $ | (3,514 | ) | $ | 70,082 | |||||||||||||||||
(1) Product, Technology, & Development | ||||||||||||||||||||||||||||||||||||||||||||||||
(2) Operating expenses include S&M, P,T&D, G&A, and depreciation & amortization | ||||||||||||||||||||||||||||||||||||||||||||||||
(3) Excludes stock-based compensation expense related to the Expense Reduction Plan of |
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Six Months Ended |
||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP expense | Stock-based compensation expense |
Amortization of intangible assets |
Acquisition-related expenses | Restructuring expenses(3) | Non-GAAP expense |
GAAP expense | Stock-based compensation expense |
Amortization of intangible assets |
Acquisition-related expenses | Restructuring expenses(3) | Non-GAAP expense |
|||||||||||||||||||||||||||||||||||||
Cost of revenue | $ | 74,375 | $ | (201 | ) | $ | — | $ | — | $ | — | $ | 74,174 | $ | 21,490 | $ | (184 | ) | $ | — | $ | (22 | ) | $ | (1,051 | ) | $ | 20,233 | ||||||||||||||||||||
S&M | 134,309 | (6,323 | ) | — | — | — | 127,986 | 132,178 | (5,756 | ) | — | (152 | ) | (1,668 | ) | 124,602 | ||||||||||||||||||||||||||||||||
P,T&D(1) | 52,794 | (12,002 | ) | — | — | — | 40,792 | 44,971 | (10,721 | ) | — | (527 | ) | (679 | ) | 33,044 | ||||||||||||||||||||||||||||||||
G&A | 46,681 | (19,407 | ) | — | (709 | ) | — | 26,565 | 30,018 | (6,943 | ) | — | (267 | ) | (116 | ) | 22,692 | |||||||||||||||||||||||||||||||
Depreciation & amortization | 16,689 | — | (14,504 | ) | — | — | 2,185 | 3,041 | — | (917 | ) | — | — | 2,124 | ||||||||||||||||||||||||||||||||||
Operating expenses(2) | $ | 250,473 | $ | (37,732 | ) | $ | (14,504 | ) | $ | (709 | ) | $ | — | $ | 197,528 | $ | 210,208 | $ | (23,420 | ) | $ | (917 | ) | $ | (946 | ) | $ | (2,463 | ) | $ | 182,462 | |||||||||||||||||
Total expenses | $ | 324,848 | $ | (37,933 | ) | $ | (14,504 | ) | $ | (709 | ) | $ | — | $ | 271,702 | $ | 231,698 | $ | (23,604 | ) | $ | (917 | ) | $ | (968 | ) | $ | (3,514 | ) | $ | 202,695 | |||||||||||||||||
(1) Product, Technology, & Development | ||||||||||||||||||||||||||||||||||||||||||||||||
(2) Operating expenses include S&M, P,T&D, G&A, and depreciation & amortization | ||||||||||||||||||||||||||||||||||||||||||||||||
(3) Excludes stock-based compensation expense related to the Expense Reduction Plan of |
Unaudited Reconciliation of GAAP Consolidated Net Income to Adjusted EBITDA
(in thousands)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Consolidated net income | $ | 27,396 | $ | 7,131 | $ | 46,947 | $ | 19,827 | |||||||
Depreciation and amortization | 10,165 | 3,357 | 18,831 | 6,347 | |||||||||||
Stock-based compensation expense | 22,540 | 11,923 | 37,933 | 23,604 | |||||||||||
Acquisition-related expenses | 65 | 24 | 709 | 968 | |||||||||||
Restructuring expenses(1) | — | 3,514 | — | 3,514 | |||||||||||
Other income, net | (61 | ) | (474 | ) | (283 | ) | (1,202 | ) | |||||||
Provision for income taxes | 11,142 | 2,052 | 17,604 | 2,103 | |||||||||||
Consolidated Adjusted EBITDA | 71,247 | 27,527 | 121,741 | 55,161 | |||||||||||
Net income attributable to redeemable noncontrolling interest | (4,805 | ) | — | (4,737 | ) | — | |||||||||
Adjusted EBITDA | $ | 66,442 | $ | 27,527 | $ | 117,004 | $ | 55,161 | |||||||
(1) Excludes stock-based compensation expense related to the Expense Reduction Plan of |
Unaudited Reconciliation of GAAP
(in thousands)
Three Months Ended | Six Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
GAAP net cash and cash equivalents provided by operating activities | $ | 37,473 | $ | 24,787 | $ | 81,335 | $ | 34,928 | |||||||
Purchases of property and equipment | (3,445 | ) | (1,357 | ) | (4,672 | ) | (2,571 | ) | |||||||
Capitalization of website development costs | (1,143 | ) | (1,029 | ) | (2,109 | ) | (1,695 | ) | |||||||
Non-GAAP free cash flow | $ | 32,885 | $ | 22,401 | $ | 74,554 | $ | 30,662 |
Non-GAAP Financial Measures and Other Business Metrics
To supplement our consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in
The presentation of non-GAAP financial information and other business metrics is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. While our non-GAAP financial measures and other business metrics are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included above, and not to rely on any single financial measure to evaluate our business.
We define Adjusted EBITDA as consolidated net income, adjusted to exclude: depreciation and amortization, stock-based compensation expense, acquisition-related expenses, restructuring expenses, other income, net, the provision for income taxes, and net income attributable to the minority interest in acquired entities, adjusted for all prior limitations to Adjusted EBITDA as previously described. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business.
We define Free Cash Flow as cash flow from operations, adjusted to include purchases of property and equipment and capitalization of website development costs. We have presented Free Cash Flow because it is a measure of the Company’s financial performance that represents the cash that the Company is able to generate after expenditures required to maintain or expand our asset base.
We also monitor operating measures of certain non-GAAP items including non-GAAP gross margin, non-GAAP expense, non-GAAP operating income, non-GAAP operating margin, non-GAAP consolidated net income, non-GAAP net income attributable to common stockholders, and non-GAAP net income attributable to common stockholders per share. These non-GAAP financial measures exclude the effect of stock-based compensation expense, amortization of intangible assets, restructuring expenses, acquisition-related expenses, and net income attributable to redeemable noncontrolling interests. Non-GAAP consolidated net income, Non-GAAP net income attributable to common stockholders, and non-GAAP net income attributable to common stockholders per share also exclude the change in tax provision from stock-based compensation expense. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to, as applicable, the timing, amount, valuation and number of future employee equity awards, and the uncertainty relating to the timing, frequency and effect of acquisitions as well as restructuring and the significance of the resulting acquisition-related expenses, restructuring expenses, or associated losses attributable to redeemable noncontrolling interests, we have provided a reconciliation of non-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release.
We define a paying dealer as a dealer account with an active, paid marketplace subscription at the end of a defined period.
We define QARSD, which is measured at the end of a fiscal quarter, as the marketplace subscription revenue during that trailing quarter divided by the average number of paying dealers in that marketplace during the quarter. We calculate the average number of paying dealers for a period by adding the number of paying dealers at the end of such period and the end of the prior period and dividing by two.
For each of our websites, we define a monthly unique user as an individual who has visited any such website within a calendar month, based on data as measured by Google Analytics. We calculate average monthly unique users as the sum of the monthly unique users of each of our websites in a given period, divided by the number of months in that period. We count a unique user the first time a computer or mobile device with a unique device identifier accesses any of our websites during a calendar month. If an individual accesses a website using a different device within a given month, the first access by each such device is counted as a separate unique user. If an individual uses multiple browsers on a single device and/or clears their cookies and returns to our site within a calendar month, we count each such visit as a unique user.
We define monthly sessions as the number of distinct visits to our websites that take place each month within a given time frame, as measured and defined by
We define leads as user inquiries via our marketplace to dealers by phone calls, email, or managed text and chat.
Investor Contact:
Kirndeep Singh
Vice President, Investor Relations
investors@cargurus.com
Source: CarGurus, Inc.