0001564590-21-041730 | 10-Q | XBRL Viewer

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

The accompanying interim condensed consolidated financial statements (the “Unaudited Condensed Consolidated Financial Statements”) are unaudited. The Unaudited Condensed Consolidated Financial Statements and related disclosures have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The Unaudited Condensed Consolidated Financial Statements have also been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2021 and December 31, 2020, results of operations, comprehensive income, changes in shareholders’ equity for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020. These interim period results are not necessarily indicative of the results to be expected for any other interim period or the full year.

The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 12, 2021 (the “Annual Report”).

In the Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020, the Company presented other non-current liabilities with accrued expenses, accrued income taxes and other current liabilities to conform to the current year presentation as it did not meet the disclosure threshold.

Principles of Consolidation

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Subsequent Event Considerations

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure.

Use of Estimates

The preparation of the Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. Changes in estimates are recorded in the period in which they become known.

Significant estimates relied upon in preparing the Unaudited Condensed Consolidated Financial Statements include the determination of sales allowance and variable consideration in the Company’s revenue recognition, allowance for doubtful accounts, the valuation of a redeemable noncontrolling interest, the valuation of equity and liability-classified compensation awards under ASC 718, the expensing and capitalization of product, technology, and development costs for website development and internal‑use software, the valuation and recoverability of goodwill and intangible assets and other long-lived assets, and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Accordingly, the Company considers these to be its critical accounting policies, and believes that of the Company’s significant accounting policies, these policies involve the greatest degree of judgment and complexity.

Concentration of Credit Risk

The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments, and trade accounts receivable.

The Company maintains its cash, cash equivalents, and investments principally with accredited financial institutions of high credit standing. Although the Company deposits its cash, cash equivalents, and investments with multiple financial institutions, its deposits may often exceed governmental insured limits.

Credit risk with respect to accounts receivable is dispersed due to the large number of customers. The Company routinely assesses the creditworthiness of its customers. The Company generally has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable.

For the three and six months ended June 30, 2021 and 2020, no individual customer accounted for more than 10% of total revenue.

As of June 30, 2021, one customer accounted for 29% of net accounts receivable. As of December 31, 2020, one customer accounted for approximately 10% of net accounts receivable.

Included in net accounts receivable at June 30, 2021 and December 31, 2020 are $6,012 and $7,426, respectively, of unbilled accounts receivable relating primarily to advertising customers billed in a period subsequent to services rendered.

Significant Accounting Policies

The Unaudited Condensed Consolidated Financial Statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the Unaudited Condensed Consolidated Financial Statements. As of June 30, 2021, the Company’s significant accounting policies and estimates, which are detailed in the Annual Report, have not changed, other than those impacted by the acquisition of a 51% interest in CarOffer and recently issued equity awards, as described below.

Redeemable Noncontrolling Interest

In connection with the Company’s acquisition of a 51% interest in CarOffer on January 14, 2021, the Company became a party with the noncontrolling equity holders of CarOffer to the CarOffer Operating Agreement (as defined in Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report), which, among other matters, sets forth certain put and call rights described in Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report. The CarOffer Operating Agreement provides the Company with the right to purchase, and the noncontrolling equity holders with the right to sell to the Company, the noncontrolling CarOffer equity holders’ equity interests in CarOffer at a contractually defined formulaic purchase price, which is based on a multiple of earnings. As the purchase is contingently redeemable at the option of the noncontrolling equity holders, the Company classifies the carrying amount of the redeemable noncontrolling interests in the mezzanine section on the Unaudited Condensed Consolidated Balance Sheet, which is presented above the equity section and below the liabilities section. As of the acquisition date, the noncontrolling interest was recognized at fair value computed using the Least Square Monte Carlo Simulation approach. Significant inputs to the model include market price of risk, volatility, correlation and risk-free rate.

Subsequent to the Company’s acquisition of the 51% interest on January 14, 2021, the redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value and its carrying amount adjusted for net loss attributable to the noncontrolling interest. Adjustments to the carrying value of the redeemable noncontrolling interest resulting from changes in the redemption value are recorded through retained earnings in the Unaudited Condensed Consolidated Balance Sheet.

Revenue Recognition

Revenue Recognition – Other Revenue

The Company generates other revenue primarily from revenue relating to the wholesale sale of automobiles, display advertising revenue from auto manufacturers and other auto-related brand advertisers and revenue from partnerships with financing services companies. CarOffer revenue is comprised entirely of wholesale revenue.

Wholesale revenue includes transaction fees earned by CarOffer from facilitating the purchase and sale of vehicles between dealers, where CarOffer collects fees from both the buyer and seller. CarOffer also sells vehicles to dealers that CarOffer acquires at other marketplaces or directly from consumers – in these instances, CarOffer collects a transaction fee from the buyer. CarOffer also charges the buyer fees to perform inspection and transportation services for all wholesale transactions.

For wholesale transactions, CarOffer generally does not control the vehicle and therefore acts as an agent in the transaction. Revenue earned from the fees for facilitating these wholesale transactions is recognized at a point in time when the vehicle is sold and revenue is recognized on a net basis.

For vehicles sold to dealers that are acquired at other marketplaces and directly from consumers, CarOffer recognizes the vehicles on its balance sheet in inventory for the short period of time it possesses the vehicle title and the fees received for the vehicle are typically recognized on a net basis. In limited circumstances, typically during an arbitration process, CarOffer acquires vehicles in transactions for which it is deemed to control the vehicle and therefore is deemed to be the principal. In these situations, the inventory is recorded on the balance sheet and valued at the lower of cost or net realizable value. The Company records inventory within prepaid expenses, prepaid income taxes and other current assets within the Unaudited Condensed Consolidated Balance Sheets.

CarOffer is deemed to control both inspection and transportation services, as it is primarily responsible for fulfillment and therefore acts as a principal. CarOffer leverages a network of third-party inspection service providers and transportation carriers. Revenue from fees for inspection services is recognized at the point in time when the inspection is performed and revenue from fees for transportation services is recognized over time as delivery is completed. Unearned revenue related to unsatisfied performance obligations is recorded as deferred revenue.

Revenue Recognition

The following table summarizes revenue from contracts with customers by geographical region and by revenue source for the three and six months ended June 30, 2021 and 2020.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
United States
Marketplace subscription revenue	$	134,088	$	75,457	$	266,116	$	208,481
Other revenue		72,496		14,289		103,479		29,271
Total		206,584		89,746		369,595		237,752
International
Marketplace subscription revenue		10,152		4,496		17,689		13,338
Other revenue		1,012		495		1,832		1,336
Total		11,164		4,991		19,521		14,674
Total Revenue
Marketplace subscription revenue		144,240		79,953		283,805		221,819
Other revenue		73,508		14,784		105,311		30,607
Total	$	217,748	$	94,737	$	389,116	$	252,426

The Company provides disaggregation of revenue based on the marketplace subscription versus other revenue classification and based on geographic region in the table above as it believes these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”) requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of the relevant quarter end.

For contracts with an original expected duration greater than one year, the aggregate amount of the transaction price allocated to the performance obligations that were unsatisfied as of June 30, 2021 was approximately $18.7 million, which the Company expects to recognize over the next 12 months.

For contracts with an original expected duration of one year or less, the Company has applied the practical expedient available under Topic 606 to not disclose the amount of transaction price allocated to unsatisfied performance obligations as of June 30, 2021. For performance obligations not satisfied as of June 30, 2021, and to which this expedient applies, the nature of the performance obligations, the variable consideration and any consideration from contracts with customers not included in the transaction price is consistent with performance obligations satisfied as of June 30, 2021.

Revenue recognized during the three months ended June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, from amounts included in deferred revenue at the beginning of the period, was approximately $11,986, $5,042, $9,137 and $9,984, respectively.

In response to the COVID-19 pandemic, the Company reduced the subscription fees for paying dealers by at least 50% on all marketplace subscriptions for the April and May 2020 service periods, as well as provided a fee reduction on all June 2020 marketplace subscriptions of 20% for paying dealers in the United States and Canada and 50% for paying dealers in the United Kingdom. These fee reductions resulted in a modification to contracts with initial contractual periods greater than one month. For any contract modified, the Company calculated the remaining transaction price and allocated the consideration over the remaining performance obligations. The Company also waived subscription fees for paying dealers in the United Kingdom for the December 2020 and February 2021 service periods. These fee reductions are included in the Company’s variable consideration assessment. The fee reductions had an immaterial impact on the Company’s revenues for the three and six months ended June 30, 2021 and a material impact on the Company’s revenues for the three and six months ended June 30, 2020.

Stock-Based Compensation

Stock‑Based Compensation

For stock‑based awards granted under the Company’s stock‑based compensation plans, the fair value of each award is determined on the date of grant.

For restricted stock units (“RSUs”) granted subject to service-based vesting conditions, the fair value is determined based on the closing price of the Company’s Class A common stock, par value $0.001 per share (the “Class A common stock”), as reported on the Nasdaq Global Select Market on the date of grant. RSUs granted subject to service-based vesting conditions generally vest over a four-year requisite service period.

For RSUs granted subject to market-based vesting conditions, the fair value is determined using the Monte Carlo simulation lattice model. The determination of the fair value using this model is affected by the Company’s stock price performance relative to the companies listed on the S&P 500 as of December 31, 2020 and a number of assumptions including volatility, correlation coefficient, risk-free interest rate and expected dividends. RSUs granted subject to market-based vesting conditions vest upon achievement of specified levels of market conditions.

For stock options granted, the fair value is determined on the date of grant using the Black‑Scholes option‑pricing model. The determination of the fair value is affected by the Company’s stock price and a number of assumptions including volatility, term, risk-free interest rate and dividend yield. Stock options granted generally have a term of ten years from the date of grant and generally vest over a four-year requisite service period.

In connection with the Company’s acquisition of a 51% interest in CarOffer, the unvested incentive units (“CO Incentive Units”) of CarOffer remained outstanding and will vest over the requisite service period. CO Incentive Units are liability-classified awards because the awards can be put to the Company at a formula price such that the holders do not bear the risks and rewards associated with equity ownership. For liability-classified awards, the fair value is determined on the date of issuance using a Least Square Monte Carlo simulation model. The determination of the fair value is affected by CarOffer’s equity value, EBITDA and revenue forecasts that drive the exercise price of future call/put rights, as well as a number of assumptions including market price of risk, volatility, correlation, and risk-free interest rate. Liability-classified awards are remeasured to fair value each period until settlement.

Grants are subject to the CarOffer 2020 Equity Incentive Plan, adopted effective November 24, 2020 (the “2020 CO Plan”), the applicable award agreement, and the CarOffer Operating Agreement. Following the Company’s acquisition of the 51% interest in CarOffer on January 14, 2021, remaining unvested incentive interests will vest over a period of three (3) years, one third each on the first, second, and third anniversaries of January 14, 2021, provided that a grantee’s continuous service to CarOffer has not terminated on the applicable vesting date. Under the terms of the grants, vesting of unvested incentive interests is accelerated in the event of (i) a change of control of CarOffer (which, for the avoidance of doubt, does not include the Company’s acquisition of the 51% interest on January 14, 2021), (ii) the death or disability of the grantee, (iii) termination of the grantee’s employment with CarOffer without cause, or (iv) termination of grantee’s employment by the grantee for good reason. Upon termination of a grantee’s continuous service to CarOffer voluntarily by the grantee (other than for good reason) or by CarOffer for cause, all of such grantee’s unvested incentive interests are forfeited. In addition, if a grantee’s continuous service terminates then CarOffer has the option to repurchase any outstanding incentive interests from the grantee.

In addition to the 2020 CO Plan, on December 9, 2020 CarOffer entered into a Vesting Agreement (the “Vesting Agreement”) regarding the vesting of CarOffer equity interests beneficially owned by Bruce Thompson, the founder and CEO of CarOffer, and certain affiliated persons (the “T5 Holders”) in connection with the Company’s anticipated acquisition of a 51% interest in CarOffer. Pursuant to the Vesting Agreement, 432,592 Class CO CarOffer units (the “Subject Units”) beneficially owned by the T5 Holders will vest in three (3) equal installments on the first, second, and third anniversary of the closing of the CarOffer Acquisition. As more particularly described in the Vesting Agreement, unvested Subject Units are subject to forfeiture in the event that Mr. Thompson’s relationship with CarOffer terminates other than in the event of a termination without cause (as defined in the Vesting Agreement) or due to Mr. Thompson’s death or disability. The Vesting Agreement also provides for acceleration of any unvested Subject Units in the event of the termination of Mr. Thompson’s employment with CarOffer without cause, Mr. Thompson’s death or disability, or the consummation of an eligible liquidity event (as defined in the Vesting Agreement).

The Company issues shares for RSUs and stock option exercises out of its shares available for issuance. The Company issues CO Incentive Units out of CarOffer’s units available for issuance. The Company accounts for forfeitures when they occur.

The Company recognizes compensation expense on a straight-line basis over the requisite service period for each separate vesting portion of the award, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date.

The tax effect of differences between tax deductions related to stock compensation and the corresponding financial statement expense compensation are recorded to tax expense. Excess tax benefits recognized on stock‑based compensation expense are classified as an operating activity in the Unaudited Condensed Consolidated Statements of Cash Flows.

Recent Accounting Pronouncements Adopted

Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance to reduce complexity in certain areas, such as requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted the guidance on January 1, 2021. The adoption did not have an impact on the Unaudited Condensed Consolidated Financial Statements.

Recent Accounting Pronouncements not Yet Adopted

Recent Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company on or prior to the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. As of June 30, 2021, there are no new accounting pronouncements that the Company is considering adopting.

Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments

The Company measures eligible assets and liabilities at fair value with changes in value recognized in earnings. There were no liabilities that were measured at fair value as of June 30, 2021 and December 31, 2020. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets and did not elect the fair value option for any financial assets transacted during the six months ended June 30, 2021 or the year ended December 31, 2020.

Cash and cash equivalents primarily consist of cash on deposit with banks and amounts held in interest-bearing money market accounts. Cash equivalents are carried at cost, which approximates their fair market value.

The Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Investments not classified as cash equivalents with maturities one year or less from the balance sheet date are classified as short-term investments, while investments with maturities in excess of one year from the balance sheet date are classified as long-term investments. Management determines the appropriate classification of investments at the time of purchase and re-evaluates such determination at each balance sheet date.

Certificates of deposit at June 30, 2021 and at December 31, 2020 had maturity dates of one year or less.

Goodwill and Other Intangible Assets

As of December 31, 2020, the Company assessed its goodwill for impairment and concluded that there was no impairment. As of December 31, 2020, the Company assessed its intangible assets for impairment and concluded that there was no impairment.

Earnings Per Share

The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including upon either the death or voluntary termination of the Company’s Executive Chairman. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one basis when computing net income per share. As a result, basic and diluted net income per share of Class A common stock and per share of Class B common stock are equivalent.

Income Taxes

The Company and its subsidiaries are subject to various U.S. federal, state, and foreign income tax examinations. The Company is currently not subject to income tax examination for the tax years of 2017 and prior as a result of applicable statute of limitations of the Internal Revenue Service (“IRS”) and state jurisdictions. The Company is currently open to examination in its foreign jurisdictions for tax years 2018 and after. In 2019, the IRS commenced a federal employment tax audit with respect to the 2018, 2017 and 2016 calendar years and expanded the audit to cover tax year 2019 as part of the audit settlement in July 2021. In 2020, the State of New York commenced a sales tax audit of the Company for the tax years 2014 to 2020, which is still open.

Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Property Plant And Equipment [Abstract]
Depreciation	$ 2,293	$ 2,872	$ 4,313	$ 5,430

Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments - Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments:	$ 85,000	$ 100,000
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments:	$ 85,000	$ 100,000
Debt Securities Held To Maturity Type Extensible List	us-gaap:CertificatesOfDepositMember	us-gaap:CertificatesOfDepositMember
Total	$ 217,474	$ 212,431
Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	132,474	112,431
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments:	$ 85,000	$ 100,000
Debt Securities Held To Maturity Type Extensible List	us-gaap:CertificatesOfDepositMember	us-gaap:CertificatesOfDepositMember
Total	$ 85,000	$ 100,000
Fair Value, Measurements, Recurring \| Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	132,474	112,431
Fair Value, Measurements, Recurring \| Money Market Funds \| Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	$ 132,474	$ 112,431

Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

During the three months ended June 30, 2021, the Company recorded an income tax provision of $11,142, representing an effective tax rate of 28.4%. The effective tax rate for the three months ended June 30, 2021 was greater than the statutory tax rate of 21% principally due to state and local income taxes, shortfalls on the taxable compensation of share-based awards and the Section 162(m) excess officer compensation limitation, which became applicable upon the expiration in May 2021 of the transition period permitted following the Company’s initial public offering (“IPO”), partially offset by federal and state research and development tax credits.

During the six months ended June 30, 2021, the Company recorded an income tax provision of $17,604, representing an effective tax rate of 25.9%. The effective tax rate for the six months ended June 30, 2021 was higher than the statutory tax rate of 21% principally due to state and local income taxes, shortfalls on the taxable compensation of share-based awards and the Section 162(m) excess officer compensation limitation, which became applicable upon the expiration in May 2021 of the transition period permitted following the IPO, partially offset by federal and state research and development tax credits.

During the three months ended June 30, 2020, the Company recorded an income tax provision of $2,052, representing an effective tax rate of 22.3%. The effective tax rate for the three months ended June 30, 2020 was higher than the statutory tax rate of 21% principally due to permanent non-deductible expenses and shortfalls on the taxable compensation of share-based awards, partially offset by federal and state research and development tax credits.

During the six months ended June 30, 2020, the Company recorded an income tax provision of $2,103, representing an effective tax rate of 9.6%. The effective tax rate for the six months ended June 30, 2020 was lower than the statutory tax rate of 21% principally due to a discrete benefit recognized as a result of the enactment of the Coronavirus Aid, Relief, and Economic Security Act, excess stock deductions from the taxable compensation of stock-based awards and federal and state research and development tax credits, partially offset by state and local income taxes.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Capitalized website development and internal-use software costs excluded from stock-based compensation expense	$ 866	$ 419	$ 1,435	$ 667
Total payments for employees' tax obligations to taxing authorities due to net share settlements and cashless exercises of options	$ 3,167	$ 2,389	$ 8,208	$ 5,786
Class A Common Stock
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Employee tax withholding requirements and option costs due to net share settlement	126,703	119,009	289,653	225,943
2020 CO Plan
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Number of shares authorized for issuances	485,714		485,714

Acquisitions - Additional Information (Details) - USD ($)		3 Months Ended				6 Months Ended
	Jan. 14, 2021	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2024	Dec. 31, 2022
Business Acquisition [Line Items]
Issuance of stock for acquisition							$ 103,645,000
Revenue		$ 217,748,000		$ 94,737,000			389,116,000	$ 252,426,000
Net loss		$ (28,052,000)	$ (22,361,000)	$ (7,131,000)	$ (12,696,000)		$ (50,413,000)	$ (19,827,000)
Car Offer
Business Acquisition [Line Items]
Business acquisition date	Jan. 14, 2021
Business acquisition, percentage of interest acquired	51.00%	51.00%	51.00%			51.00%	51.00%
Business acquisition, total consideration	$ 173,155,000
Issuance of stock for acquisition	103,645,000
Payments to acquire business	69,510,000
Retention pool aggregate amount	8,000,000
Retention pool amount granted to employees	6,000,000
Retention pool amount available for issuance to future employees	2,000,000
Acquisition-related costs incurred							$ 2,647,000
Revenue		$ 57,289,000				$ 72,855,000
Net loss		1,720,000				$ 9,089,000
Car Offer \| 2022 Call Right \| Forecast
Business Acquisition [Line Items]
Business acquisition, option to acquire remaining percentage of interest										25.00%
Business acquisition, option to acquire remaining value of interest									$ 100,000,000
Car Offer \| General and Administrative
Business Acquisition [Line Items]
Acquisition-related costs incurred		$ 65,000					$ 709,000
Car Offer \| Class A Common Stock
Business Acquisition [Line Items]
Issuance of stock for acquisition	$ 103,645,000
Business acquisition, stock consideration shares issued	3,115,282
Business acquisition, share price	$ 22.51

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities

6 Months Ended

Jun. 30, 2021

Accrued Liabilities Current [Abstract]

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities

8. Accrued Expenses, Accrued Income Taxes and Other Current Liabilities

Accrued expenses, accrued income taxes and other current liabilities consist of the following:

	At June 30, 2021		At December 31, 2020
Accrued income taxes	$	7,828	$	233
Accrued bonus		8,363		10,845
Accrued commissions		2,612		3,941
Other accrued expenses and other current liabilities		14,591		9,732
Total	$	33,394	$	24,751

Revenue Recognition - Summary of Revenue from Contracts with Customers by Geographical Region and by Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation Of Revenue [Line Items]
Revenue	$ 217,748	$ 94,737	$ 389,116	$ 252,426
Marketplace Subscription Revenue
Disaggregation Of Revenue [Line Items]
Revenue	144,240	79,953	283,805	221,819
Other Revenue
Disaggregation Of Revenue [Line Items]
Revenue	73,508	14,784	105,311	30,607
United States
Disaggregation Of Revenue [Line Items]
Revenue	206,584	89,746	369,595	237,752
United States \| Marketplace Subscription Revenue
Disaggregation Of Revenue [Line Items]
Revenue	134,088	75,457	266,116	208,481
United States \| Other Revenue
Disaggregation Of Revenue [Line Items]
Revenue	72,496	14,289	103,479	29,271
International
Disaggregation Of Revenue [Line Items]
Revenue	11,164	4,991	19,521	14,674
International \| Marketplace Subscription Revenue
Disaggregation Of Revenue [Line Items]
Revenue	10,152	4,496	17,689	13,338
International \| Other Revenue
Disaggregation Of Revenue [Line Items]
Revenue	$ 1,012	$ 495	$ 1,832	$ 1,336

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
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+ Details

Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments

5. Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments

The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021 and at December 31, 2020:

	At June 30, 2021
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	132,474	$	—	$	—	$	132,474
Investments:
Certificates of deposit		—		85,000		—		85,000
Total	$	132,474	$	85,000	$	—	$	217,474

	At December 31, 2020
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	112,431	$	—	$	—	$	112,431
Investments:
Certificates of deposit		—		100,000		—		100,000
Total	$	112,431	$	100,000	$	—	$	212,431

Certificates of deposit at June 30, 2021 and at December 31, 2020 had maturity dates of one year or less.

The following is a summary of investments as of June 30, 2021 and December 31, 2020, respectively:

	At June 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments:
Certificates of deposit due in one year or less	$	85,000	$	—	$	—	$	85,000
Total	$	85,000	$	—	$	—	$	85,000

	At December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments:
Certificates of deposit due in one year or less	$	100,000	$	—	$	—	$	100,000
Total	$	100,000	$	—	$	—	$	100,000

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2021

Accrued Liabilities Current [Abstract]

Schedule of Accrued Expenses, Accrued Income Taxes and Other Current Liabilities

Accrued expenses, accrued income taxes and other current liabilities consist of the following:

	At June 30, 2021		At December 31, 2020
Accrued income taxes	$	7,828	$	233
Accrued bonus		8,363		10,845
Accrued commissions		2,612		3,941
Other accrued expenses and other current liabilities		14,591		9,732
Total	$	33,394	$	24,751

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 61,589	$ 53,477
Less accumulated depreciation and amortization	(29,948)	(25,994)
Property and equipment, net	31,641	27,483
Computer Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	8,589	8,108
Capitalized Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	149	149
Capitalized Website Development
Property Plant And Equipment [Line Items]
Property and equipment, gross	19,313	16,328
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	8,240	7,320
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	24,057	20,507
Construction in Progress
Property Plant And Equipment [Line Items]
Property and equipment, gross	588	1,024
Finance Lease Right-of-use Assets
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 653	$ 41

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

Principles of Consolidation

Subsequent Event Considerations

Use of Estimates

Concentration of Credit Risk

For the three and six months ended June 30, 2021 and 2020, no individual customer accounted for more than 10% of total revenue.

As of June 30, 2021, one customer accounted for 29% of net accounts receivable. As of December 31, 2020, one customer accounted for approximately 10% of net accounts receivable.

Significant Accounting Policies

Redeemable Noncontrolling Interest

Revenue Recognition – Other Revenue

Stock‑Based Compensation

For stock‑based awards granted under the Company’s stock‑based compensation plans, the fair value of each award is determined on the date of grant.

Recent Accounting Pronouncements Adopted

Income Taxes

Recent Accounting Pronouncements Not Yet Adopted

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income Per Share

The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share:

	Three Months Ended June 30,					Six Months Ended June 30,
	2021			2020		2021			2020
Numerator:
Consolidated net income	$	27,396		$	7,131	$	46,947		$	19,827
Less: Net income (loss) attributable to redeemable noncontrolling interest		(656	)		—		(3,466	)		—
Net income attributable to common stockholders — basic	$	28,052		$	7,131	$	50,413		$	19,827
Add: Net income (loss) attributable to redeemable noncontrolling interest		(656	)		—		(656	)		—
Net income attributable to common stockholders — diluted	$	27,396		$	7,131	$	49,757		$	19,827
Denominator:
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
Dilutive effect of share equivalents resulting from stock options		450,512			674,063		481,802			735,474
Dilutive effect of share equivalents resulting from unvested restricted stock units		300,916			329,009		360,363			667,024
Dilutive effect of share equivalents resulting from CarOffer incentive units and noncontrolling interest		1,577,781			—		788,891			—
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — diluted		119,454,104			113,737,465		118,353,969			113,947,241
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

Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding

The following potentially dilutive common stock equivalents have been excluded from the calculation of diluted weighted-average shares outstanding for the three and six months ended June 30, 2021 and 2020, as their effect would have been anti-dilutive for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Stock options outstanding		588,490		—		457,714		—
Restricted stock units outstanding		2,849,737		3,277,151		2,671,279		3,051,380

Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 09, 2020 Installment shares	Jun. 30, 2021 USD ($) Customer $ / shares	Jun. 30, 2020 Customer	Jun. 30, 2021 USD ($) Customer $ / shares	Jun. 30, 2020 Customer	Dec. 31, 2020 USD ($) Customer $ / shares	Mar. 31, 2021	Jan. 14, 2021
Summary Of Significant Accounting Policies [Line Items]
Description of significant off-balance sheet risk				The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.
ASU 2019-12
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted		true		true
Change in accounting principle, accounting standards update, adoption date		Jan. 01, 2021		Jan. 01, 2021
Change in accounting principle, accounting standards update, immaterial effect		true		true
Change in accounting principle, accounting standards update, transition option elected				us-gaap:AccountingStandardsUpdate201912Member
2020 CO Plan
Summary Of Significant Accounting Policies [Line Items]
Requisite service period				3 years
Class A Common Stock
Summary Of Significant Accounting Policies [Line Items]
Common stock, par value \| $ / shares		$ 0.001		$ 0.001		$ 0.001
Car Offer
Summary Of Significant Accounting Policies [Line Items]
Business acquisition, percentage of interest acquired		51.00%		51.00%			51.00%	51.00%
Car Offer \| Vesting Agreement
Summary Of Significant Accounting Policies [Line Items]
Business acquisition, percentage of interest acquired	51.00%
Vesting number of shares \| shares	432,592
Number of Installment \| Installment	3
Car Offer \| Restricted Stock Units
Summary Of Significant Accounting Policies [Line Items]
Requisite service period				4 years
Car Offer \| Stock Options
Summary Of Significant Accounting Policies [Line Items]
Requisite service period				4 years
Vesting period				10 years
Car Offer \| Class A Common Stock
Summary Of Significant Accounting Policies [Line Items]
Common stock, par value \| $ / shares		$ 0.001		$ 0.001
Sales Revenue, Net \| Concentration of Credit Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration of credit risk, percentage		10.00%	10.00%	10.00%	10.00%
Number of major customers \| Customer		0	0	0	0
Net Accounts Receivable \| Advertising Customers
Summary Of Significant Accounting Policies [Line Items]
Unbilled accounts receivable \| $		$ 6,012		$ 6,012		$ 7,426
Net Accounts Receivable \| Concentration of Credit Risk
Summary Of Significant Accounting Policies [Line Items]
Number of major customers \| Customer				1		1
Net Accounts Receivable \| Concentration of Credit Risk \| Customer One
Summary Of Significant Accounting Policies [Line Items]
Concentration of credit risk, percentage				29.00%		10.00%

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2021

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following:

	At June 30, 2021			At December 31, 2020
Computer equipment	$	8,589		$	8,108
Capitalized software		149			149
Capitalized website development		19,313			16,328
Furniture and fixtures		8,240			7,320
Leasehold improvements		24,057			20,507
Construction in progress		588			1,024
Finance lease right-of-use assets		653			41
		61,589			53,477
Less accumulated depreciation and amortization		(29,948	)		(25,994	)
Property and equipment, net	$	31,641		$	27,483

Organization and Business Description

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Organization and Business Description

1. Organization and Business Description

CarGurus, Inc. (the “Company”) is a multinational, online automotive platform for buying and selling vehicles that is building upon its industry-leading listings marketplace with both digital retail solutions and the CarOffer online wholesale platform. The CarGurus marketplace gives consumers the confidence to purchase or sell a vehicle either online or in-person; and gives dealerships the power to accurately price, effectively market, instantly acquire and quickly sell vehicles, all with a nationwide reach. The Company uses proprietary technology, search algorithms and data analytics to bring trust, transparency and competitive pricing to the automotive shopping experience.

The Company is headquartered in Cambridge, Massachusetts and was incorporated in the State of Delaware on June 26, 2015.

The Company operates principally in the United States. In the United States, it also operates the Autolist online marketplace, which it wholly owns, and the CarOffer, LLC (“CarOffer”) digital wholesale marketplace, in which it has a 51% interest, as independent brands. In addition to the United States, the Company operates online marketplaces under the CarGurus brand in Canada and the United Kingdom. In the United Kingdom, it also operates the PistonHeads online marketplace, which it wholly owns, as an independent brand. The Company also operated online marketplaces in Germany, Italy, and Spain until it ceased the operations of each of these marketplaces in the second quarter of 2020.

The Company has subsidiaries in the United States, Canada, Ireland, and the United Kingdom. Additionally, it has two reportable segments, United States and International. See Note 13 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Segment and Geographic Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment and Geographic Information

13. Segment and Geographic Information

The Company has two reportable segments, United States and International. Segment information is presented in the same manner as the Company’s chief operating decision maker (the “CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews revenue and operating income (loss) for each reportable segment as a proxy for the operating performance of the Company’s United States and International operations. The Company’s Chief Executive Officer is the CODM on behalf of both reportable segments.

The United States segment derives revenues from marketplace subscriptions and other revenues from customers within the United States. The International segment derives revenues from marketplace subscriptions and other revenues from customers outside of the

United States. A majority of the Company’s operational overhead expenses, including technology and personnel costs, and other general and administrative costs associated with running the Company’s business, are incurred in the United States and not allocated to the International segment. Revenue and costs discretely incurred by reportable segments, including depreciation and amortization, are included in the calculation of reportable segment income (loss) from operations. Segment operating income (loss) does not reflect the transfer pricing adjustments related to the Company’s foreign subsidiaries, which are recorded for statutory reporting purposes. Asset information is assessed and reviewed on a global basis.

Information regarding the Company’s operations by segment and geographical area is presented as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Segment revenue:
United States	$	206,584	$	89,746	$	369,595	$	237,752
International		11,164		4,991		19,521		14,674
Total revenue	$	217,748	$	94,737	$	389,116	$	252,426

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Segment income (loss) from operations:
United States	$	40,194		$	15,337		$	69,584		$	35,599
International		(1,717	)		(6,628	)		(5,316	)		(14,871	)
Total income from operations	$	38,477		$	8,709		$	64,268		$	20,728

The Company ceased the operations of the International segment online marketplaces in Germany, Italy, and Spain in the second quarter of 2020.

As of June 30, 2021, total assets held outside of the United States were $33,537, primarily attributable to $16,119 of goodwill. As of December 31, 2020, total assets held outside of the United States were $32,012, primarily attributable to $16,652 of goodwill and $3,571 of intangible assets.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Earnings Per Share - Additional Information (Details)	3 Months Ended		6 Months Ended
Earnings Per Share - Additional Information (Details)	Jun. 30, 2021 shares	Jun. 30, 2020 shares	Jun. 30, 2021 Vote shares	Jun. 30, 2020 shares
Earnings Per Share Basic [Line Items]
Conversion of stock, description			Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including upon either the death or voluntary termination of the Company’s Executive Chairman.
Undistributed earnings ratio used to calculate allocation to class of stock			100.00%
Market Based Performance Awards
Earnings Per Share Basic [Line Items]
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding	282,921		282,921
Class A Common Stock
Earnings Per Share Basic [Line Items]
Right to voting			one vote per share
Number of votes entitled to stockholders per share \| Vote			1
Conversion of stock	0	3,748	929,597	339,489
Class B Common Stock
Earnings Per Share Basic [Line Items]
Right to voting			ten votes per share
Number of votes entitled to stockholders per share \| Vote			10
Class of share converted to another class			one share of Class A common stock
Conversion of stock			1

Acquisitions - Summary of Total Consideration Transferred (Details) - USD ($) $ in Thousands		6 Months Ended
	Jan. 14, 2021	Jun. 30, 2021	Jun. 30, 2020
Business Acquisition [Line Items]
Cash paid, net of cash acquired		$ 64,273	$ 21,004
Issuance of stock for acquisition		$ 103,645
Car Offer
Business Acquisition [Line Items]
Cash paid, net of cash acquired	$ 64,273
Cash acquired	5,237
Payments to acquire business	69,510
Issuance of stock for acquisition	103,645
Total consideration transferred	$ 173,155

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 184,642	$ 190,299
Investments	85,000	100,000
Accounts receivable, net of allowance for doubtful accounts of $418 and $616, respectively	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
Goodwill	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
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
Commitments and contingencies (Note 9)
Redeemable noncontrolling interest	54,565
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
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
Class A Common Stock
Stockholders’ equity:
Common stock	99	94
Class B Common Stock
Stockholders’ equity:
Common stock	$ 18	$ 19

Acquisitions - Summary of Preliminary Purchase Price Allocation (Details) - USD ($)
$ in Thousands

Jun. 30, 2021

Jan. 14, 2021

Dec. 31, 2020

Business Acquisition [Line Items]

Goodwill

$ 156,098

$ 29,129

Car Offer

Business Acquisition [Line Items]

Cash and cash equivalents

$ 5,237

Accounts receivable

16,119

Prepaid expenses, prepaid income taxes and other current assets

2,433

Property and equipment, net

198

Intangible assets

^[1]

104,100

Goodwill

^[2]

127,500

Operating lease right-of-use assets

709

Accounts payable

(8,888)

Accrued expenses, accrued income taxes, and other current liabilities

(15,513)

Operating lease liabilities - current

(230)

Operating lease liabilities - non-current

(479)

Redeemable noncontrolling interest

^[3]

(58,031)

Total consideration transferred

$ 173,155

[1]	Identifiable definite-lived intangible assets were comprised of developed technology, brand, and customer relationships of $63,000, $23,100, and $18,000, respectively, with estimated useful lives of 3 years, 11 years, and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives. The fair value of the developed technology has been estimated using the multi-period excess earnings method which is a variation of the income approach. The fair value of the brand and customer relationships has been estimated using the relief from royalty method and the with/without approach, respectively.
[2]	Goodwill represents the excess value of the purchase price over net assets acquired, primarily attributable to adding wholesale vehicle acquisition and selling capabilities to CarGurus’ portfolio of dealer offerings. All goodwill is assigned to the United States reporting segment. For tax purposes, $29,006 of the goodwill is estimated to be deductible under IRC Section 197 and will be concluded upon finalization of the transaction cost study. In connection with the transaction, the Company accelerated certain stock options deemed to be outside of consideration transferred. Therefore, the Company recognized an additional $1,229 of stock-based compensation expense during the three months ended June 30, 2021.
[3]	The fair value of the redeemable noncontrolling interest has been estimated using the Least Square Monte Carlo Simulation approach. Significant inputs include market price of risk, volatility, correlation and risk-free rate.

Organization and Business Description - Additional Information (Details) - Segment	6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jan. 14, 2021
Business Acquisition [Line Items]
State of incorporation	DE
Date of incorporation	Jun. 26, 2015
Number of reportable segments	2
Car Offer
Business Acquisition [Line Items]
Business acquisition, percentage of interest acquired	51.00%	51.00%	51.00%

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities - Schedule of Accrued Expenses, Accrued Income Taxes and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Accrued Liabilities Current [Abstract]
Accrued income taxes	$ 7,828	$ 233
Accrued bonus	8,363	10,845
Accrued commissions	2,612	3,941
Other accrued expenses and other current liabilities	14,591	9,732
Total	$ 33,394	$ 24,751

Stock-based Compensation - Summary of Stock-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 22,540	$ 11,923	$ 37,933	$ 23,604
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	635	3	1,252	17
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	13,944	$ 11,920	27,687	$ 23,587
CO Incentive Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 7,961		$ 8,994

Earnings Per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

11. Earnings Per Share

During the three months ended June 30, 2021, holders of Class B common stock did not convert any shares of Class B common stock to Class A common stock. During the three months ended June 30, 2020, holders of Class B common stock converted 3,748 shares

of Class B common stock to Class A common stock. During the six months ended June 30, 2021 and 2020, holders of Class B common stock converted 929,597 and 339,489 shares of Class B common stock to Class A common stock, respectively.

Basic net income per share (“Basic EPS”) is computed by dividing net income attributable to common stockholders and adjusted to reflect changes in the redemption value of the redeemable noncontrolling interest, if applicable, by the weighted-average number of common shares outstanding during the reporting period. The Company computes the weighted-average number of common shares outstanding during the reporting period using the total number of shares of Class A common stock and Class B common stock outstanding as of the last day of the previous year plus the weighted-average of any additional shares issued and outstanding during the reporting period.

Diluted net income per share (“Diluted EPS”) gives effect to all potentially dilutive securities. Diluted EPS is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period using (i) the number of shares of common stock used in the Basic EPS calculation as indicated above, (ii) if dilutive, the incremental weighted-average common stock that the Company would issue upon the exercise of stock options and the vesting of RSUs, (iii) if dilutive, market-based performance awards based on the number of shares that would be issuable as of the end of the reporting period assuming the end of the reporting period was also the end of the contingency period. The dilutive effect of these common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. The if-converted method is used to calculate the number of shares issuable upon exercise of the 2024 Put Right, inclusive of CarOffer noncontrolling interest and incentive units, that would be issuable as of the end of the reporting period assuming the end of the reporting period was also the end of the contingency period.

The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share:

	Three Months Ended June 30,					Six Months Ended June 30,
	2021			2020		2021			2020
Numerator:
Consolidated net income	$	27,396		$	7,131	$	46,947		$	19,827
Less: Net income (loss) attributable to redeemable noncontrolling interest		(656	)		—		(3,466	)		—
Net income attributable to common stockholders — basic	$	28,052		$	7,131	$	50,413		$	19,827
Add: Net income (loss) attributable to redeemable noncontrolling interest		(656	)		—		(656	)		—
Net income attributable to common stockholders — diluted	$	27,396		$	7,131	$	49,757		$	19,827
Denominator:
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
Dilutive effect of share equivalents resulting from stock options		450,512			674,063		481,802			735,474
Dilutive effect of share equivalents resulting from unvested restricted stock units		300,916			329,009		360,363			667,024
Dilutive effect of share equivalents resulting from CarOffer incentive units and noncontrolling interest		1,577,781			—		788,891			—
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — diluted		119,454,104			113,737,465		118,353,969			113,947,241
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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Stock options outstanding		588,490		—		457,714		—
Restricted stock units outstanding		2,849,737		3,277,151		2,671,279		3,051,380

In addition, shares of Class A common stock potentially issuable under market-based performance awards of approximately 282,921 were excluded from the calculation of weighted average shares used to compute Diluted EPS for both the three and six months ended June 30, 2021 as the market-based vesting conditions had not been achieved as of the reporting period end date and as such there were zero contingently issuable shares.

Unaudited Condensed Consolidated Income Statements (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Depreciation and amortization expense	$ 1,143	$ 1,837	$ 2,142	$ 3,306

Acquisitions - Unaudited Pro Forma Consolidated Financial Information (Parenthetical) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Business Acquisition [Line Items]
Intangibles amortization	$ 7,858	$ 485	$ 14,504	$ 917
Stock based compensation			28,747	23,375
Car Offer
Business Acquisition [Line Items]
Intangibles amortization	7,275	7,275	14,550	14,550
Stock based compensation	$ 7,123	$ 7,123	$ 8,730	$ 8,545

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Allowance for doubtful accounts	$ 418	$ 616
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A Common Stock
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	99,060,368	94,310,309
Common stock, shares outstanding	99,060,368	94,310,309
Class B Common Stock
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	18,146,903	19,076,500
Common stock, shares outstanding	18,146,903	19,076,500

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2021	Jul. 29, 2021
Document And Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Registrant Name	CARGURUS, INC.
Trading Symbol	CARG
Entity Central Index Key	0001494259
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity File Number	001-38233
Entity Tax Identification Number	04-3843478
Entity Address, Address Line One	2 Canal Park
Entity Address, Address Line Two	4th Floor
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02141
City Area Code	617
Local Phone Number	354-0068
Entity Interactive Data Current	Yes
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	DE
Title of 12(b) Security	Class A Common Stock, par value $0.001 per share
Security Exchange Name	NASDAQ
Class A Common Stock
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		100,531,108
Class B Common Stock
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		16,840,805

Goodwill and Other Intangible Assets - Summary of Other Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 117,494	$ 13,504
Accumulated Amortization	17,146	2,642
Net Carrying Amount	$ 100,348	$ 10,862
Brand
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	9 years 10 months 24 days	8 years 4 months 24 days
Gross Carrying Amount	$ 32,406	$ 9,405
Accumulated Amortization	2,679	1,235
Net Carrying Amount	$ 29,727	$ 8,170
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	2 years 6 months	1 year 7 months 6 days
Gross Carrying Amount	$ 19,874	$ 1,886
Accumulated Amortization	4,003	938
Net Carrying Amount	$ 15,871	$ 948
Developed Technology
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	2 years 6 months	1 year
Gross Carrying Amount	$ 65,214	$ 2,213
Accumulated Amortization	10,464	469
Net Carrying Amount	$ 54,750	$ 1,744

Acquisitions

6 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Acquisitions

4. Acquisitions

On January 14, 2021, the Company acquired a 51% interest in CarOffer, which provides an automated instant vehicle trade platform and is based in Addison, Texas, pursuant to the terms of a Membership Interest Purchase Agreement (the “Purchase Agreement”) dated as of December 9, 2020 (the “Agreement Date”), as amended, by and among the Company, CarOffer, CarOffer Investors Holding, LLC, a Delaware limited liability company (“TopCo”), each of the Members of TopCo (the “Members”), and Bruce T. Thompson, an individual residing in Texas (the “Members’ Representative”). This acquisition (the “CarOffer Acquisition”) is intended to add wholesale vehicle purchasing and selling capabilities to CarGurus’ portfolio of dealer offerings and create a complete and efficient digital solution for dealers to sell and acquire vehicles at both retail and wholesale.

Upon consummation of the transactions contemplated by the Purchase Agreement (the “Closing”), the Company acquired a 51% interest in CarOffer for an aggregate consideration of $173,155 (the “Total Consideration”), such Total Consideration consisting of (a) shares of Class A common stock in the aggregate amount of $103,645 (the “Stock Consideration”) and (b) $69,510 in cash (the “Cash Consideration”). The number of shares of Class A common stock issued following the Closing in connection with the Stock Consideration was 3,115,282, which was calculated by reference to a value of $22.51 per share, which equals the volume-weighted average closing price per share of Class A common stock on the Nasdaq Stock Market for the 28 consecutive trading days ending on the third Business Day (as defined in the Purchase Agreement) preceding the Agreement Date. Pursuant to the Purchase Agreement, the remaining equity in CarOffer (the “Remaining Equity”) is being retained by the then-current equity holders of CarOffer and subject to certain call and put arrangements discussed below.

Pursuant to the Purchase Agreement, the Company established a retention pool in an aggregate amount of $8,000 in the form of RSUs to be issued pursuant to the Company’s standard form of RSU agreement under the 2017 Plan, (i) $6,000 of which was granted to certain CarOffer employees following the Closing in accordance with the terms of the Purchase Agreement and (ii) $2,000 of which is available for issuance to future CarOffer employees in accordance with the terms of the Purchase Agreement. RSUs issued from the retention pool will be subject to vesting based on rendering of future services.

As of June 30, 2021, the Company incurred total acquisition-related costs of $2,647 related to the CarOffer Acquisition, of which $65 and $709 was incurred during the three and six months ended June 30, 2021, respectively, and recorded as general and administrative operating expenses within the Unaudited Condensed Consolidated Income Statements. Acquisition-related costs were excluded from the purchase price allocation as they were primarily comprised of legal, professional and consulting expenses.

The following table presents the total consideration transferred.

	Consideration Transferred
Cash paid, net of cash acquired	$	64,273
Cash acquired		5,237
Cash consideration		69,510
Stock consideration		103,645
Total consideration transferred	$	173,155

The CarOffer Acquisition has been accounted for as a business combination under the acquisition method and, accordingly, the total consideration is allocated to the acquired assets and assumed liabilities. The Company’s 51% interest in CarOffer represents a controlling financial interest in the entity as the minority interest holders only have protective rights such that CarOffer is consolidated as of the acquisition date. The following table presents the preliminary purchase price allocation recorded in the Company’s Unaudited Condensed Consolidated Balance Sheet as of the acquisition date, which is subject to finalization for estimates of the fair value of assets acquired and liabilities assumed as of the acquisition date, including, but not limited to tangible assets, intangible assets and tax-related items, and the related tax effects of any changes made:

	Adjusted Fair Value at Date of Acquisition
Cash and cash equivalents	$	5,237
Accounts receivable		16,119
Prepaid expenses, prepaid income taxes and other current assets		2,433
Property and equipment, net		198
Intangible assets ⁽¹⁾		104,100
Goodwill ⁽²⁾		127,500
Operating lease right-of-use assets		709
Accounts payable		(8,888	)
Accrued expenses, accrued income taxes, and other current liabilities		(15,513	)
Operating lease liabilities - current		(230	)
Operating lease liabilities - non-current		(479	)
Redeemable noncontrolling interest ⁽³⁾		(58,031	)
Total consideration transferred	$	173,155

(1)

Identifiable definite-lived intangible assets were comprised of developed technology, brand, and customer relationships of $63,000, $23,100, and $18,000, respectively, with estimated useful lives of 3 years, 11 years, and 3 years, respectively, which will be amortized on a straight-line basis over their estimated useful lives. The fair value of the developed technology has been estimated using the multi-period excess earnings method which is a variation of the income approach. The fair value of the brand and customer relationships has been estimated using the relief from royalty method and the with/without approach, respectively.

(2)

Goodwill represents the excess value of the purchase price over net assets acquired, primarily attributable to adding wholesale vehicle acquisition and selling capabilities to CarGurus’ portfolio of dealer offerings. All goodwill is assigned to the United States reporting segment. For tax purposes, $29,006 of the goodwill is estimated to be deductible under IRC Section 197 and will be concluded upon finalization of the transaction cost study. In connection with the transaction, the Company accelerated certain stock options deemed to be outside of consideration transferred. Therefore, the Company recognized an additional $1,229 of stock-based compensation expense during the three months ended June 30, 2021.

(3)

The fair value of the redeemable noncontrolling interest has been estimated using the Least Square Monte Carlo Simulation approach. Significant inputs include market price of risk, volatility, correlation and risk-free rate.

In addition, the Company, TopCo, each Member and CarOffer MidCo, LLC, a Delaware limited liability company, entered into the Second Amended and Restated Limited Liability Company Agreement, dated as of December 9, 2020 (the “CarOffer Operating Agreement”), pursuant to which, among other matters, the Company secured the right to appoint a majority of the members of the Board of Managers of CarOffer, other rights customary for a transaction of this nature and the put and call rights described below.

In the second half of 2022, the Company will have a call right (the “2022 Call Right”), exercisable in its sole discretion, to acquire a portion of the Remaining Equity representing up to twenty-five percent (25%) of the fully diluted capitalization of CarOffer (such acquired Remaining Equity, the “2022 Acquired Remaining Equity”) at an implied CarOffer value (the “2022 Call Right Value”) of seven (7) times CarOffer’s trailing twelve months gross profit as of June 30, 2022 (calculated in accordance with the defined terms and subject to the adjustments set forth in the CarOffer Operating Agreement). If the 2022 Call Right is exercised by the Company, the 2022 Acquired Remaining Equity will be purchased ratably across all of the holders of CarOffer equity securities other than the Company. The consideration to be paid by the Company in connection with the exercise of the 2022 Call Right will be in the form of cash and/or shares of Class A common stock, as determined by the Company in its sole discretion.

In the second half of 2024, (a) the Company will have a call right (the “2024 Call Right”), exercisable in its sole discretion, to acquire all, and not less than all, of the Remaining Equity that it has not acquired pursuant to the 2022 Call Right and the Closing, at the greater of (i) (x) one hundred million dollars ($100,000,000), and (y) the 2022 Call Right Value, whichever is less, and (ii) an implied CarOffer value of twelve (12) times CarOffer’s trailing twelve months EBITDA as of June 30, 2024 (in each case calculated in accordance with the defined terms and subject to the adjustments set forth in the CarOffer Operating Agreement), and (b) the representative of the holders of the Remaining Equity will have a put right (the “2024 Put Right”), exercisable in his, her or their sole discretion, to have the holders of the Remaining Equity sell to the Company, all, and not less than all, of the Remaining Equity at an implied CarOffer value of twelve (12) times CarOffer’s trailing twelve months EBITDA as of June 30, 2024 (calculated in accordance with the defined terms and subject to the adjustments set forth in the CarOffer Operating Agreement). The determination of whether the 2024 Call Right or the 2024 Put Right is ultimately exercised is as set forth in the CarOffer Operating Agreement. The consideration to be paid by the Company in connection with the exercise of either the 2024 Call Right or the 2024 Put Right, as applicable, will be in the form of cash and/or shares of Class A common stock, as determined by the Company in its sole discretion.

The foregoing summary of the Purchase Agreement, the CarOffer Operating Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement and the CarOffer Operating Agreement, which are filed as exhibits to the Annual Report.

The following unaudited pro forma consolidated financial information combines the unaudited results of the Company for the three and six months ended June 30, 2021 and 2020 and the unaudited results of CarOffer for the three and six months ended June 30, 2021 and 2020, and assumes that the CarOffer Acquisition, which closed on January 14, 2021, was completed on January 1, 2020 (the first day of fiscal year 2020). The pro forma consolidated financial information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization expense of acquired intangible assets, transaction-related costs, and compensation expense for ongoing share-based compensation arrangements replaced, together with the consequential tax effects. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been achieved had the CarOffer Acquisition actually taken place on January 1, 2020. In addition, these results are not intended to be a projection of future results and do not reflect events that may occur after June 30, 2021, including, but not limited to revenue enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the CarOffer Acquisition.

	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
Revenue	$	217,748	$	98,341		$	392,055	$	261,535
Consolidated net income (loss) ⁽¹⁾	$	28,755	$	(7,223	)	$	47,941	$	(5,522	)

(1)

For the three months ended June 30, 2021, pro forma consolidated net income includes $7,275 and $7,123 related to intangibles amortization and stock-based compensation for CarOffer, respectively. For the three months ended June 30, 2020, pro forma consolidated net loss includes $7,275 and $7,123 related to intangibles amortization and stock-based compensation for CarOffer, respectively. For the six months ended June 30, 2021, pro forma consolidated net income includes $14,550 and $8,730 related to intangibles amortization and stock-based compensation for CarOffer, respectively. For the six months ended June 30, 2020, pro forma consolidated net loss includes $14,550 and $8,545 related to intangibles amortization and stock-based compensation for CarOffer, respectively.

$57,289 of revenue and $1,720 of net loss attributable to CarOffer is included in our Unaudited Condensed Consolidated Income Statement for the three months ended June 30, 2021. $72,855 of revenue and $9,089 of net loss attributable to CarOffer is included in our Unaudited Condensed Consolidated Income Statement from the acquisition date of January 14, 2021 to June 30, 2021.

Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock-based Compensation Expense by Award Type

The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s Unaudited Condensed Consolidated Income Statements:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options	$	635	$	3	$	1,252	$	17
Restricted stock units		13,944		11,920		27,687		23,587
CO Incentive Units		7,961		—		8,994		—
Total stock-based compensation expense	$	22,540	$	11,923	$	37,933	$	23,604

Summary of Allocation of Stock-based Compensation Expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of revenue	$	109	$	85	$	201	$	184
Sales and marketing expense		3,571		3,064		6,323		5,756
Product, technology, and development expense		6,230		5,316		12,002		10,721
General and administrative expense		12,630		3,458		19,407		6,943
Total stock-based compensation expense	$	22,540	$	11,923	$	37,933	$	23,604

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

7. Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying value of goodwill were as follows:

Balance at December 31, 2020	$	29,129
CarOffer acquisition⁽¹⁾		127,500
Foreign currency translation adjustment		(531	)
Balance at June 30, 2021	$	156,098

(1)

See Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

The Company tests goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. As of June 30, 2021, there have been no events or changes in circumstance that the carrying value may not be recoverable. As of December 31, 2020, the Company assessed its goodwill for impairment and concluded that there was no impairment.

Other Intangible Assets

Intangible assets as of June 30, 2021 and December 31, 2020 consist of the following:

	At June 30, 2021
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Brand		9.9		32,406		2,679	$	29,727
Customer relationships		2.5		19,874		4,003		15,871
Developed technology		2.5		65,214		10,464		54,750
Total			$	117,494	$	17,146	$	100,348

	At December 31, 2020
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Brand		8.4	$	9,405	$	1,235	$	8,170
Customer relationships		1.6		1,886		938		948
Developed technology		1.0		2,213		469		1,744
Total			$	13,504	$	2,642	$	10,862

The Company recorded amortization expense related to intangible assets of $7,858, $485, $14,504, and $917 for the three months ended June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, respectively.

The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. As of June 30, 2021, there have been no events or changes in circumstances that could impact the recoverability of these assets. As of December 31, 2020, the Company assessed its intangible assets for impairment and concluded that there was no impairment.

Estimated amortization expense of intangible assets for future periods as of June 30, 2021 is as follows:

Year Ending December 31,	Amortization Expense
Remainder of 2021	$	15,725
2022		31,062
2023		30,336
2024		4,206
2025		3,060
2026		3,060
Thereafter		12,899
Total	$	100,348

Goodwill and Other Intangible Assets - Summary of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Remainder of 2021	$ 15,725
2022	31,062
2023	30,336
2024	4,206
2025	3,060
2026	3,060
Thereafter	12,899
Net Carrying Amount	$ 100,348	$ 10,862

Segment and Geographic Information - Additional Information (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($) Segment	Dec. 31, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| Segment	2
Assets	$ 784,205	$ 502,298
Goodwill	156,098	29,129
Intangible assets, net	100,348	10,862
International
Segment Reporting Information [Line Items]
Assets	33,537	32,012
Goodwill	$ 16,119	16,652
Intangible assets, net		$ 3,571

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(11))
-URI http://asc.fasb.org/extlink&oid=120398452&loc=d3e534808-122878

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+ Details

Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis

The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021 and at December 31, 2020:

	At June 30, 2021
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	132,474	$	—	$	—	$	132,474
Investments:
Certificates of deposit		—		85,000		—		85,000
Total	$	132,474	$	85,000	$	—	$	217,474

	At December 31, 2020
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Cash equivalents:
Money market funds	$	112,431	$	—	$	—	$	112,431
Investments:
Certificates of deposit		—		100,000		—		100,000
Total	$	112,431	$	100,000	$	—	$	212,431

Schedule of Investments

The following is a summary of investments as of June 30, 2021 and December 31, 2020, respectively:

	At June 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments:
Certificates of deposit due in one year or less	$	85,000	$	—	$	—	$	85,000
Total	$	85,000	$	—	$	—	$	85,000

	At December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments:
Certificates of deposit due in one year or less	$	100,000	$	—	$	—	$	100,000
Total	$	100,000	$	—	$	—	$	100,000

Stock-based Compensation

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

10. Stock-based Compensation

Equity Incentive Plans

The 2020 CO Plan provides for the issuance of incentive interests to CarOffer’s employees, officers, managers, and consultants. The 2020 CO Plan authorized up to an aggregate of 485,714 incentive interests for such issuances. The Vesting Agreement provides for the vesting of the Subject Units beneficially owned by the T5 Holders, which vest in accordance with the terms described in Note 2 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Stock-based Compensation Expense

The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s Unaudited Condensed Consolidated Income Statements:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options	$	635	$	3	$	1,252	$	17
Restricted stock units		13,944		11,920		27,687		23,587
CO Incentive Units		7,961		—		8,994		—
Total stock-based compensation expense	$	22,540	$	11,923	$	37,933	$	23,604

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of revenue	$	109	$	85	$	201	$	184
Sales and marketing expense		3,571		3,064		6,323		5,756
Product, technology, and development expense		6,230		5,316		12,002		10,721
General and administrative expense		12,630		3,458		19,407		6,943
Total stock-based compensation expense	$	22,540	$	11,923	$	37,933	$	23,604

Excluded from stock-based compensation expense is $866, $419, $1,435 and $667 of capitalized website development and internal-use software costs for the three months ended June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, respectively.

During the three months ended June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, the Company withheld 126,703, 119,009, 289,653 and 225,943 shares of Class A common stock, respectively, to satisfy employee tax withholding requirements and for option exercise costs due to net share settlements and cashless exercises of options. The shares withheld return to the authorized, but unissued pool under the 2017 Plan and can be reissued by the Company. Total payments to satisfy employee tax withholding requirements and for option exercise costs due to net share settlements and cashless exercises of options were $3,167, $2,389, $8,208 and $5,786 for the three months ended June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, respectively, and are reflected as a financing activity within the Unaudited Condensed Consolidated Statements of Cash Flows.

Acquisitions (Tables)

6 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Summary of Total Consideration Transferred

The following table presents the total consideration transferred.

	Consideration Transferred
Cash paid, net of cash acquired	$	64,273
Cash acquired		5,237
Cash consideration		69,510
Stock consideration		103,645
Total consideration transferred	$	173,155

Summary of Preliminary Purchase Price Allocation

The Company’s 51% interest in CarOffer represents a controlling financial interest in the entity as the minority interest holders only have protective rights such that CarOffer is consolidated as of the acquisition date. The following table presents the preliminary purchase price allocation recorded in the Company’s Unaudited Condensed Consolidated Balance Sheet as of the acquisition date, which is subject to finalization for estimates of the fair value of assets acquired and liabilities assumed as of the acquisition date, including, but not limited to tangible assets, intangible assets and tax-related items, and the related tax effects of any changes made:

	Adjusted Fair Value at Date of Acquisition
Cash and cash equivalents	$	5,237
Accounts receivable		16,119
Prepaid expenses, prepaid income taxes and other current assets		2,433
Property and equipment, net		198
Intangible assets ⁽¹⁾		104,100
Goodwill ⁽²⁾		127,500
Operating lease right-of-use assets		709
Accounts payable		(8,888	)
Accrued expenses, accrued income taxes, and other current liabilities		(15,513	)
Operating lease liabilities - current		(230	)
Operating lease liabilities - non-current		(479	)
Redeemable noncontrolling interest ⁽³⁾		(58,031	)
Total consideration transferred	$	173,155

(1)

(2)

(3)

Unaudited Pro Forma Consolidated Financial Information

	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
Revenue	$	217,748	$	98,341		$	392,055	$	261,535
Consolidated net income (loss) ⁽¹⁾	$	28,755	$	(7,223	)	$	47,941	$	(5,522	)

(1)

Unaudited Condensed Consolidated Income Statements - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2021

Jun. 30, 2020

Jun. 30, 2021

Jun. 30, 2020

Income Statement [Abstract]

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

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: (Note 11)

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 June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020 of $1,143, $1,837, $2,142, and $3,306, respectively.

Segment and Geographic Information - Summary of Operations by Segment and Geographical Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment revenue:
Revenue	$ 217,748	$ 94,737	$ 389,116	$ 252,426
Segment income (loss) from operations:
Total income from operations	38,477	8,709	64,268	20,728
United States
Segment revenue:
Revenue	206,584	89,746	369,595	237,752
Segment income (loss) from operations:
Total income from operations	40,194	15,337	69,584	35,599
International
Segment revenue:
Revenue	11,164	4,991	19,521	14,674
Segment income (loss) from operations:
Total income from operations	$ (1,717)	$ (6,628)	$ (5,316)	$ (14,871)

- Definition

+ References

+ Details

Stock-based Compensation - Summary of Allocation of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 22,540	$ 11,923	$ 37,933	$ 23,604
Cost of Revenue
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	109	85	201	184
Sales and Marketing Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	3,571	3,064	6,323	5,756
Product, Technology, and Development Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	6,230	5,316	12,002	10,721
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 12,630	$ 3,458	$ 19,407	$ 6,943

Unaudited Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders' Equity - USD ($) $ in Thousands	Total	Class A Common Stock	Class B Common Stock	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2019	$ 256,855			$ 92	$ 20	$ 205,234	$ 51,859	$ (350)
Beginning balance, Shares at Dec. 31, 2019				91,819,649	20,314,644
Net income (loss)	12,696						12,696
Stock–based compensation expense	11,793					11,793
Issuance of common stock upon exercise of stock options	514					514
Issuance of common stock upon exercise of stock options, Shares				160,668
Issuance of common stock upon vesting of restricted stock units				$ 1		(1)
Issuance of common stock upon vesting of restricted stock units, Shares				308,303
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(3,397)					(3,397)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares				(106,934)
Conversion of common stock, shares issued				335,741
Conversion of common stock, shares converted					(335,741)
Foreign currency translation adjustment	(493)							(493)
Ending balance at Mar. 31, 2020	277,968			$ 93	$ 20	214,143	64,555	(843)
Ending balance, Shares at Mar. 31, 2020				92,517,427	19,978,903
Beginning balance at Dec. 31, 2019	256,855			$ 92	$ 20	205,234	51,859	(350)
Beginning balance, Shares at Dec. 31, 2019				91,819,649	20,314,644
Net income (loss)	19,827
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares		(225,943)
Foreign currency translation adjustment	(12)
Ending balance at Jun. 30, 2020	295,855			$ 93	$ 20	224,418	71,686	(362)
Ending balance, Shares at Jun. 30, 2020				92,862,607	19,975,155
Beginning balance at Mar. 31, 2020	277,968			$ 93	$ 20	214,143	64,555	(843)
Beginning balance, Shares at Mar. 31, 2020				92,517,427	19,978,903
Net income (loss)	7,131						7,131
Stock–based compensation expense	12,249					12,249
Issuance of common stock upon exercise of stock options	415					415
Issuance of common stock upon exercise of stock options, Shares				84,796
Issuance of common stock upon vesting of restricted stock units, Shares				375,645
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(2,389)					(2,389)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares		(119,009)		(119,009)
Conversion of common stock, shares issued				3,748
Conversion of common stock, shares converted					(3,748)
Foreign currency translation adjustment	481							481
Ending balance at Jun. 30, 2020	295,855			$ 93	$ 20	224,418	71,686	(362)
Ending balance, Shares at Jun. 30, 2020				92,862,607	19,975,155
Beginning balance at Dec. 31, 2020	373,586			$ 94	$ 19	242,181	129,412	1,880
Beginning balance, Shares at Dec. 31, 2020		94,310,309	19,076,500	94,310,309	19,076,500
Net income (loss)	22,361						22,361
Redeemable Noncontrolling Interest, Net income (loss)	(2,810)
Stock–based compensation expense	14,929					14,929
Issuance of common stock upon exercise of stock options	258					258
Issuance of common stock upon exercise of stock options, Shares				93,455
Issuance of common stock upon vesting of restricted stock units				$ 1		(1)
Issuance of common stock upon vesting of restricted stock units, Shares				473,883
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(5,041)					(5,041)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares				(162,950)
Conversion of common stock				$ 1
Conversion of common stock, shares issued				929,597
Conversion of common stock, shares converted					(929,597)
Conversion of common stock, value					$ (1)
Issuance of common stock upon for acquisition	103,645			$ 3		103,642
Issuance of common stock upon for acquisition, Shares				3,115,282
Acquisition of a 51% interest in CarOffer, LLC	58,031
Foreign currency translation adjustment	(1,083)							(1,083)
Ending balance at Mar. 31, 2021	508,655			$ 99	$ 18	355,968	151,773	797
Redeemable Noncontrolling Interest, Ending balance at Mar. 31, 2021	55,221
Ending balance, Shares at Mar. 31, 2021				98,759,576	18,146,903
Beginning balance at Dec. 31, 2020	373,586			$ 94	$ 19	242,181	129,412	1,880
Beginning balance, Shares at Dec. 31, 2020		94,310,309	19,076,500	94,310,309	19,076,500
Net income (loss)	50,413
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares		(289,653)
Foreign currency translation adjustment	(835)
Ending balance at Jun. 30, 2021	549,181			$ 99	$ 18	368,194	179,825	1,045
Redeemable Noncontrolling Interest, Ending balance at Jun. 30, 2021	54,565
Ending balance, Shares at Jun. 30, 2021		99,060,368	18,146,903	99,060,368	18,146,903
Beginning balance at Mar. 31, 2021	508,655			$ 99	$ 18	355,968	151,773	797
Redeemable Noncontrolling Interest, Beginning balance at Mar. 31, 2021	55,221
Beginning balance, Shares at Mar. 31, 2021				98,759,576	18,146,903
Net income (loss)	28,052						28,052
Redeemable Noncontrolling Interest, Net income (loss)	(656)
Stock–based compensation expense	15,253					15,253
Issuance of common stock upon exercise of stock options	140					140
Issuance of common stock upon exercise of stock options, Shares				36,027
Issuance of common stock upon vesting of restricted stock units, Shares				391,468
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(3,167)					(3,167)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares		(126,703)		(126,703)
Foreign currency translation adjustment	248							248
Ending balance at Jun. 30, 2021	549,181			$ 99	$ 18	$ 368,194	$ 179,825	$ 1,045
Redeemable Noncontrolling Interest, Ending balance at Jun. 30, 2021	$ 54,565
Ending balance, Shares at Jun. 30, 2021		99,060,368	18,146,903	99,060,368	18,146,903

Goodwill and Other Intangible Assets - Summary of Changes in Carrying Value of Goodwill (Details)
$ in Thousands

6 Months Ended

Jun. 30, 2021

USD ($)

Goodwill And Intangible Assets Disclosure [Abstract]

Balance at December 31, 2020

$ 29,129

CarOffer acquisition

127,500

^[1]

Foreign currency translation adjustment

(531)

Balance at June 30, 2021

$ 156,098

[1]	See Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report

Acquisitions - Unaudited Pro Forma Consolidated Financial Information (Details) - Car Offer - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Business Acquisition [Line Items]
Revenue	$ 217,748	$ 98,341	$ 392,055	$ 261,535
Consolidated net income (loss)	$ 28,755	$ (7,223)	$ 47,941	$ (5,522)

Commitments and Contingencies - Additional Information (Details)			6 Months Ended
	Jan. 25, 2021 USD ($) ft²	Jul. 01, 2019 USD ($) ft²	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Commitments And Contingencies [Line Items]
Operating lease right-of-use assets			$ 67,024,000	$ 60,835,000
Restricted cash			$ 19,357,000	$ 10,627,000
Car Offer \| Addison, Texas at 15601 Dallas Parkway
Commitments And Contingencies [Line Items]
Operating lease, office space \| ft²	61,826
Sublease term description			non-cancellable lease term through 2030
Sublease commencement date	Mar. 01, 2021
Sublease rent commencement date	Jan. 01, 2022
Sublease monthly base rent payable	$ 152,000
Increase in sublease monthly base rent, maximum amount payable	$ 185,000
Car Offer \| Addison, Texas at 15601 Dallas Parkway \| Furniture and Fixtures
Commitments And Contingencies [Line Items]
Operating lease right-of-use assets percentage	5.00%
Operating lease right-of-use assets	$ 664,000
Car Offer \| Addison, Texas at 15601 Dallas Parkway \| Office Space
Commitments And Contingencies [Line Items]
Operating lease right-of-use assets percentage	95.00%
Operating lease right-of-use assets	$ 12,336,000
Car Offer \| Plano, Texas at 2701 East Plano Parkway
Commitments And Contingencies [Line Items]
Operating lease, office space \| ft²		26,971
Sublease term description			non-cancellable lease term through 2023
Sublease commencement date		Jul. 01, 2019
Sublease rent commencement date		Jul. 01, 2019
Sublease monthly base rent payable		$ 21,000
Increase in sublease monthly base rent, maximum amount payable		$ 22,000

Revenue Recognition

6 Months Ended

Jun. 30, 2021

Revenue From Contract With Customer [Abstract]

Revenue Recognition

3. Revenue Recognition

Revenue Recognition

The following table summarizes revenue from contracts with customers by geographical region and by revenue source for the three and six months ended June 30, 2021 and 2020.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
United States
Marketplace subscription revenue	$	134,088	$	75,457	$	266,116	$	208,481
Other revenue		72,496		14,289		103,479		29,271
Total		206,584		89,746		369,595		237,752
International
Marketplace subscription revenue		10,152		4,496		17,689		13,338
Other revenue		1,012		495		1,832		1,336
Total		11,164		4,991		19,521		14,674
Total Revenue
Marketplace subscription revenue		144,240		79,953		283,805		221,819
Other revenue		73,508		14,784		105,311		30,607
Total	$	217,748	$	94,737	$	389,116	$	252,426

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 12
-Subparagraph (b)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Topic 606
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-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Unaudited Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders' Equity (Parenthetical)	Jun. 30, 2021	Mar. 31, 2021	Jan. 14, 2021
Car Offer
Business acquisition, percentage of interest acquired	51.00%	51.00%	51.00%

Property and Equipment, Net

6 Months Ended

Jun. 30, 2021

Property Plant And Equipment [Abstract]

Property and Equipment, Net

6. Property and Equipment, Net

Property and equipment, net consists of the following:

	At June 30, 2021			At December 31, 2020
Computer equipment	$	8,589		$	8,108
Capitalized software		149			149
Capitalized website development		19,313			16,328
Furniture and fixtures		8,240			7,320
Leasehold improvements		24,057			20,507
Construction in progress		588			1,024
Finance lease right-of-use assets		653			41
		61,589			53,477
Less accumulated depreciation and amortization		(29,948	)		(25,994	)
Property and equipment, net	$	31,641		$	27,483

Depreciation and amortization expense, excluding amortization of intangible assets, was $2,293, $2,872, $4,313 and $5,430 for the three months ended June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, respectively.

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating Activities
Consolidated net income	$ 46,947	$ 19,827
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	18,831	6,347
Currency gain on foreign denominated transactions	(30)	(91)
Deferred taxes	2,336	4,695
Provision for doubtful accounts	450	1,658
Stock-based compensation expense	28,747	23,375
Amortization of deferred contract costs	6,454	5,641
Changes in operating assets and liabilities:
Accounts receivable, net	(47,982)	5,653
Prepaid expenses, prepaid income taxes, and other assets	(4,018)	2,835
Deferred contract costs	(5,098)	(4,074)
Accounts payable	15,333	(25,914)
Accrued expenses, accrued income taxes, and other liabilities	15,580	(4,134)
Deferred revenue	3,989	(1,788)
Lease obligations	(204)	898
Net cash provided by operating activities	81,335	34,928
Investing Activities
Purchases of property and equipment	(4,672)	(2,571)
Capitalization of website development costs	(2,109)	(1,695)
Cash paid for acquisitions, net of cash acquired	(64,273)	(21,004)
Investments in certificates of deposit	(45,000)
Maturities of certificates of deposit	60,000	68,692
Net cash (used in) provided by investing activities	(56,054)	43,422
Financing Activities
Proceeds from exercise of stock options	398	929
Payment of finance lease obligations	(13)	(18)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(8,208)	(5,786)
Repayment of line of credit	(14,250)
Net cash used in financing activities	(22,073)	(4,875)
Impact of foreign currency on cash, cash equivalents, and restricted cash	(135)	24
Net increase in cash, cash equivalents, and restricted cash	3,073	73,499
Cash, cash equivalents, and restricted cash at beginning of period	200,926	70,723
Cash, cash equivalents, and restricted cash at end of period	203,999	144,222
Supplemental disclosure of cash flow information:
Cash paid for income taxes	8,220	26
Unpaid purchases of property and equipment	245	7
Capitalized stock-based compensation expense in website development and internal-use software costs	1,435	667
Cash paid for operating lease liabilities	8,064	$ 6,260
Obtaining a right-of-use asset in exchange for a finance lease liability	664
Obtaining a right-of-use asset in exchange for an operating lease liability	12,336
Issuance of stock for acquisition	$ 103,645

Earnings Per Share - Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Numerator:
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 — basic	28,052	7,131	50,413	19,827
Add: Net income (loss) attributable to redeemable noncontrolling interest	(656)		(656)
Net income attributable to common stockholders — diluted	$ 27,396	$ 7,131	$ 49,757	$ 19,827
Denominator:
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
Dilutive effect of share equivalents resulting from stock options	450,512	674,063	481,802	735,474
Dilutive effect of share equivalents resulting from unvested restricted stock units	300,916	329,009	360,363	667,024
Dilutive effect of share equivalents resulting from CarOffer incentive units and noncontrolling interest	1,577,781		788,891
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — diluted	119,454,104	113,737,465	118,353,969	113,947,241
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

Acquisitions - Summary of Preliminary Purchase Price Allocation (Parenthetical) (Details) - Car Offer - USD ($)
$ in Thousands

3 Months Ended

Jan. 14, 2021

Jun. 30, 2021

Business Acquisition [Line Items]

Intangible assets

^[1]

$ 104,100

Goodwill estimated to be deductible under IRC Section 197

29,006

Additional stock-based compensation expense

$ 1,229

Developed Technology

Business Acquisition [Line Items]

Intangible assets

$ 63,000

Estimated useful lives

3 years

Brand

Business Acquisition [Line Items]

Intangible assets

$ 23,100

Estimated useful lives

11 years

Customer Relationships

Business Acquisition [Line Items]

Intangible assets

$ 18,000

Estimated useful lives

3 years

[1]

Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of goodwill					$ 0
Amortization expense of intangible assets	$ 7,858,000	$ 485,000	$ 14,504,000	$ 917,000
Impairment of intangible assets					$ 0

Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]
Consolidated net income	$ 27,396	$ 7,131	$ 46,947	$ 19,827
Other comprehensive income (loss):
Foreign currency translation adjustment	248	481	(835)	(12)
Consolidated comprehensive income	27,644	7,612	46,112	19,815
Less comprehensive loss attributable to redeemable noncontrolling interests	(656)		(3,466)
Comprehensive income attributable to common stockholders	$ 28,300	$ 7,612	$ 49,578	$ 19,815

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Carrying Value of Goodwill

The changes in the carrying value of goodwill were as follows:

Balance at December 31, 2020	$	29,129
CarOffer acquisition⁽¹⁾		127,500
Foreign currency translation adjustment		(531	)
Balance at June 30, 2021	$	156,098

(1)

See Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Summary of Other Intangible Assets

Intangible assets as of June 30, 2021 and December 31, 2020 consist of the following:

	At June 30, 2021
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Brand		9.9		32,406		2,679	$	29,727
Customer relationships		2.5		19,874		4,003		15,871
Developed technology		2.5		65,214		10,464		54,750
Total			$	117,494	$	17,146	$	100,348

	At December 31, 2020
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Brand		8.4	$	9,405	$	1,235	$	8,170
Customer relationships		1.6		1,886		938		948
Developed technology		1.0		2,213		469		1,744
Total			$	13,504	$	2,642	$	10,862

Summary of Estimated Amortization Expense of Intangible Assets

Estimated amortization expense of intangible assets for future periods as of June 30, 2021 is as follows:

Year Ending December 31,	Amortization Expense
Remainder of 2021	$	15,725
2022		31,062
2023		30,336
2024		4,206
2025		3,060
2026		3,060
Thereafter		12,899
Total	$	100,348

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2021

Revenue From Contract With Customer [Abstract]

Summary of Revenue from Contracts with Customers by Geographical Region and by Revenue

The following table summarizes revenue from contracts with customers by geographical region and by revenue source for the three and six months ended June 30, 2021 and 2020.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
United States
Marketplace subscription revenue	$	134,088	$	75,457	$	266,116	$	208,481
Other revenue		72,496		14,289		103,479		29,271
Total		206,584		89,746		369,595		237,752
International
Marketplace subscription revenue		10,152		4,496		17,689		13,338
Other revenue		1,012		495		1,832		1,336
Total		11,164		4,991		19,521		14,674
Total Revenue
Marketplace subscription revenue		144,240		79,953		283,805		221,819
Other revenue		73,508		14,784		105,311		30,607
Total	$	217,748	$	94,737	$	389,116	$	252,426

Earnings Per Share - Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Stock Options Outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding	588,490		457,714
Restricted Stock Units Outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding	2,849,737	3,277,151	2,671,279	3,051,380

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax Examination [Line Items]
Income tax provision (benefit)	$ 11,142	$ 2,052	$ 17,604	$ 2,103
Effective income tax rate	28.40%	22.30%	25.90%	9.60%
Statutory tax rate	21.00%	21.00%	21.00%	21.00%
New York \| Earliest Tax Year
Income Tax Examination [Line Items]
Income tax sales tax audit year under examination			2014
New York \| Latest Tax Year
Income Tax Examination [Line Items]
Income tax sales tax audit year under examination			2020
UK Revenue Agency \| Foreign
Income Tax Examination [Line Items]
Open tax year			2018
Canada Revenue Agency \| Foreign
Income Tax Examination [Line Items]
Open tax year			2018
Revenue Commissioners, Ireland \| Foreign
Income Tax Examination [Line Items]
Open tax year			2018
Internal Revenue Service (IRS) \| State
Income Tax Examination [Line Items]
Closed tax year			2017
Internal Revenue Service (IRS) \| Domestic Tax Authority
Income Tax Examination [Line Items]
Closed tax year			2017

Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments - Additional Information (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Liabilities, fair value	$ 0	$ 0
Maturity period of certificates of deposit	1 year	1 year
Maturity of certificates of deposit, description	Certificates of deposit at June 30, 2021 and at December 31, 2020 had maturity dates of one year or less.

Fair Value of Financial Instruments Including Cash, Cash Equivalents, and Investments - Schedule of Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Certificates of deposit due in one year or less, Amortized Cost	$ 85,000	$ 100,000
Held to maturity amortized cost	85,000	100,000
Certificates of deposit due in one year or less, Estimated Fair Value	85,000	100,000
Held to maturity fair value	$ 85,000	$ 100,000

Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Contractual Obligations and Commitments

All of the Company’s property, equipment, and internal-use software have been purchased with cash with the exception of amounts related to unpaid property and equipment and internal use software and amounts related to obligations under finance leases as disclosed in the Unaudited Condensed Consolidated Statements of Cash Flows as of June 30, 2021. The Company has no material long-term purchase obligations outstanding with any vendor or third party.

Leases

The Company’s primary operating lease obligations consist of various leases for office space in: Boston, Massachusetts; Cambridge, Massachusetts; San Francisco, California; Addison, Texas; Plano, Texas; and Dublin, Ireland. The Company also has an operating lease obligation for data center space in Needham, Massachusetts.

As of June 30, 2021, there were no material changes in the Company’s material leases from those disclosed in the Annual Report, other than as discussed below.

On January 25, 2021, CarOffer entered into a sublease in Addison, Texas at 15601 Dallas Parkway for approximately 61,826 square feet of office space with a non-cancellable lease term through 2030. The sublease commenced on March 1, 2021. CarOffer’s monthly base rent for the premises, which is payable from January 1, 2022, will initially be approximately $152, and will increase each year up to a maximum monthly base rent of approximately $185. In connection with the sublease, CarOffer entered into a financing lease arrangement for furniture and fixtures used in connection with its operations. The term of the financing lease is for the entire period of the sublease. The monthly rent for the furniture and fixtures is included in the sublease monthly rent, with ownership of the furniture and fixtures transferring to CarOffer at the expiration of the lease term. Monthly rent payments are allocated based upon the relative fair value of the office space and furniture of 95% and 5%, respectively. Upon commencement, the right of use asset for the office space and furniture was $12,336 and $664, respectively.

On July 1, 2019, CarOffer entered into a sublease in Plano, Texas at 2701 East Plano Parkway, for the lease of approximately 26,971 square feet of office space with a non-cancellable lease term through 2023. The sublease commenced on July 1, 2019. CarOffer’s monthly base rent for the premises, which is payable from July 1, 2019, was initially approximately $21, and will increase each year up to maximum monthly base rent of $22. The Company acquired the lease as part of the CarOffer Acquisition.

The Company’s leases in Boston, Massachusetts, Cambridge, Massachusetts and San Francisco, California have associated letters of credit, which are recorded as restricted cash within the Unaudited Condensed Consolidated Balance Sheet. At June 30, 2021 and December 31, 2020, restricted cash was $19,357 and $10,627, respectively, and primarily related to cash held at a financial institution in an interest‑bearing cash account as collateral for the letters of credit related to the contractual provisions for the Company’s building leases. Restricted cash at June 30, 2021 also includes pass-through payments from customers related to the Company’s wholesale business. At June 30, 2021 and December 31, 2020, portions of restricted cash were classified as a short-term asset and long‑term asset, as disclosed on the Unaudited Condensed Consolidated Balance Sheet.

Acquisitions

On January 14, 2021, the Company completed the CarOffer Acquisition, details of which are described in Note 4 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Legal Matters

From time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. The Company is not presently subject to any pending or threatened litigation that it believes, if determined adversely to the Company, individually, or taken together, would reasonably be expected to have a material adverse effect on its business or financial results.

Guarantees and Indemnification Obligations

In the ordinary course of business, the Company enters into agreements with its customers, partners and service providers that include commercial provisions with respect to licensing, infringement, indemnification, and other common provisions. The Company does not, in the ordinary course, agree to guaranty or indemnification obligations for the Company under its contracts with customers.

Based on historical experience and information known at June 30, 2021 and December 31, 2020, the Company has not incurred any costs for guarantees or indemnities.

Segment and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Summary of Operations by Segment and Geographical Area

Information regarding the Company’s operations by segment and geographical area is presented as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Segment revenue:
United States	$	206,584	$	89,746	$	369,595	$	237,752
International		11,164		4,991		19,521		14,674
Total revenue	$	217,748	$	94,737	$	389,116	$	252,426

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Segment income (loss) from operations:
United States	$	40,194		$	15,337		$	69,584		$	35,599
International		(1,717	)		(6,628	)		(5,316	)		(14,871	)
Total income from operations	$	38,477		$	8,709		$	64,268		$	20,728

Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2020	May 31, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation Of Revenue [Line Items]
Performance obligation unsatisfied			$ 18,700		$ 18,700
Revenue recognized			$ 11,986	$ 5,042	$ 9,137	$ 9,984
All Marketplace Subscriptions
Disaggregation Of Revenue [Line Items]
Percentage fee reduction on marketplace subscription services		50.00%
United States
Disaggregation Of Revenue [Line Items]
Percentage fee reduction on marketplace subscription services	20.00%
Canada
Disaggregation Of Revenue [Line Items]
Percentage fee reduction on marketplace subscription services	20.00%
United Kingdom
Disaggregation Of Revenue [Line Items]
Percentage fee reduction on marketplace subscription services	50.00%