8-K
false000149425900014942592021-11-092021-11-09

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 9, 2021

 

CarGurus, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-38233

04-3843478

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

2 Canal Park, 4th Floor

Cambridge, Massachusetts 02141

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 354-0068

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock,
par value $0.001 per share

 

CARG

 

The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On November 9, 2021, CarGurus, Inc. (the “Company”) announced its financial results for the quarter ended September 30, 2021. The full text of the press release issued by the Company in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02 and in the press release attached as Exhibit 99.1 hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

No.

 

Description

99.1

 

Press Release of CarGurus, Inc. dated November 9, 2021, reporting its financial results for the quarter ended September 30, 2021, furnished hereto.

104

 

Cover Page Interactive Data File (embedded with the Inline XBRL document).

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

CARGURUS, INC.

 

 

 

 

Date: November 9, 2021

 

By:

/s/ Scot Fredo

 

 

 

Name: Scot Fredo

 

 

 

Title: Chief Financial Officer

 

 


EX-99.1

 

Exhibit 99.1

https://cdn.kscope.io/cc5719cc77490335be6996423e54a487-img239243378_0.jpg 

 

CarGurus Announces Third Quarter 2021 Results

Third Quarter Highlights:

Total revenue of $222.9 million, an increase of 51% year-over-year
GAAP operating income of $40.1 million; non-GAAP operating income of $63.1 million
GAAP consolidated net income of $29.3 million; non-GAAP consolidated net income of $49.5 million
GAAP net income attributable to common stockholders of $29.2 million; non-GAAP net income attributable to common stockholders of $46.3 million
Cash, cash equivalents and short-term investments of $321.1 million
Consolidated Adjusted EBITDA of $65.9 million; Adjusted EBITDA of $62.5 million

CAMBRIDGE, MA: November 9, 2021 — CarGurus, Inc. (Nasdaq: CARG), a multinational, online automotive platform for buying and selling vehicles, today announced financial results for the third quarter ended September 30, 2021.

"We are thrilled to have exceeded our guidance for the quarter," said Jason Trevisan, Chief Executive Officer of CarGurus. "Performance this quarter was driven by three key factors: our ongoing evolution from a listings business to an end-to-end transaction-enabled marketplace, our partnership with dealers to develop innovative digitally initiated solutions, and finally, our ability to provide consumers a self-selective digital retail journey when buying or selling a vehicle. With these three areas driving our performance during the third quarter, we were pleased to see strong dealer penetration of our CarOffer platform, swift execution and rapid expansion of CarGurus Instant Max Cash Offer, and continued innovation as we bring digitally initiated capabilities to our consumer audience and dealer partners."

Revenue

Total revenue was $222.9 million, an increase of 51% compared to $147.5 million in the third quarter of 2020.

Marketplace subscription revenue was $144.6 million, an increase of 11% compared to $130.0 million in the third quarter of 2020.

Wholesale and other revenue was $78.3 million, an increase of 347% compared to $17.5 million in the third quarter of 2020.

Operating Income

GAAP operating income was $40.1 million, or 18% of total revenue, compared to $43.6 million, or 30% of total revenue, in the third quarter of 2020.

Non-GAAP operating income was $63.1 million, or 28% of total revenue, compared to $55.1 million, or 37% of total revenue, in the third quarter of 2020.

 


Consolidated Net Income, Net Income Attributable to Common Stockholders, Consolidated Adjusted EBITDA, & Adjusted EBITDA

GAAP consolidated net income was $29.3 million during the third quarter ended September 30, 2021, compared to $32.6 million during the third quarter ended September 30, 2020.

Non-GAAP consolidated net income was $49.5 million during the third quarter ended September 30, 2021, compared to $41.9 million during the third quarter ended September 30, 2020.

GAAP net income attributable to common stockholders was $29.2 million, or $0.24 per fully diluted share, during the third quarter ended September 30, 2021, compared to $32.6 million, or $0.29 per fully diluted share, during the third quarter ended September 30, 2020.

Non-GAAP net income attributable to common stockholders was $46.3 million, or $0.38 per fully diluted share, during the third quarter ended September 30, 2021, compared to $41.9 million, or $0.37 per fully diluted share, during the third quarter ended September 30, 2020.

Consolidated Adjusted EBITDA, a non-GAAP metric, was $65.9 million for the third quarter ended September 30, 2021, compared to $57.0 million for the third quarter ended September 30, 2020.

Adjusted EBITDA, a non-GAAP metric, was $62.5 million for the third quarter ended September 30, 2021, compared to $57.0 million for the third quarter ended September 30, 2020.

Balance Sheet and Cash Flow

As of September 30, 2021, CarGurus had cash, cash equivalents and short-term investments of $321.1 million and no debt.

CarGurus generated $53.7 million in cash from operations and $51.4 million in free cash flow, a non-GAAP metric, during the third quarter of 2021, compared to having generated $73.9 million in cash from operations and $72.4 million in free cash flow during the third quarter of 2020.

Third Quarter Business Metrics(1)

U.S. revenue was $211.6 million in the third quarter of 2021, an increase of 53% compared to $138.4 million in the third quarter of 2020. U.S. marketplace subscription revenue was $134.3 million in the third quarter of 2021, an increase of 10% compared to $121.8 million in the third quarter of 2020. U.S. wholesale and other revenue was $77.3 million in the third quarter of 2021, an increase of 366% compared to $16.6 million in the third quarter of 2020. GAAP operating income in the U.S. was $41.9 million, a decrease of (10%) compared to $46.5 million in the third quarter of 2020.

International revenue was $11.4 million in the third quarter of 2021, an increase of 25% compared to $9.1 million in the third quarter of 2020. International marketplace subscription revenue was $10.3 million in the third quarter of 2021, an increase of 27% compared to $8.1 million in the third quarter of 2020. International wholesale and other revenue was $1.0 million in the third quarter of 2021, an increase of 12% compared to $0.9 million in the third quarter of 2020. GAAP operating loss in International markets was ($1.9) million, a reduction in loss of 36% compared to a loss of ($2.9) million in the third quarter of 2020.

Total paying dealers were 30,754 at September 30, 2021, an increase of 2% compared to 30,162 at September 30, 2020. Of the total paying dealers at September 30, 2021, U.S. and International accounted for 23,979 and 6,775, respectively, compared to 23,659 and 6,503, respectively, at September 30, 2020.

Quarterly Average Revenue per Subscribing Dealer (“QARSD”) in the U.S. was $5,602 as of September 30, 2021, an increase of 9% compared to $5,133 as of September 30, 2020.

QARSD in International markets was $1,524 as of September 30, 2021, an increase of 21% compared to $1,256 as of September 30, 2020.

Website traffic and consumer engagement metrics for the third quarter of 2021 were as follows:

 


o
U.S. average monthly unique users were 28.8 million, a decrease of (25%) compared to 38.7 million in the third quarter of 2020. U.S. average monthly sessions were 71.2 million, a decrease of (25%) compared to 94.3 million in the third quarter of 2020.
o
International average monthly unique users were 7.5 million, a decrease of (4%) compared to 7.8 million in the third quarter of 2020. International average monthly sessions were 17.1 million, a decrease of (6%) compared to 18.3 million in the third quarter of 2020.

 

(1)
CarOffer is excluded from the metrics presented for paying dealers, QARSD, users and sessions.

Fourth Quarter and Full-Year 2021 Guidance

CarGurus anticipates total revenue, non-GAAP operating income, and non-GAAP earnings per share to be in the following ranges:

Fourth Quarter 2021:

 

Total revenue

$273 million to $285 million

Non-GAAP operating income

$44 million to $50 million

Non-GAAP EPS

$0.28 to $0.30

 

The fourth quarter 2021 non-GAAP earnings per share calculation assumes 120.5 million diluted weighted-average common shares outstanding.

Full-Year 2021:

 

Total revenue

$885 million to $897 million

Non-GAAP operating income

$224.4 million to $230.4 million

Non-GAAP EPS

$1.41 to $1.43

 

The full-year non-GAAP earnings per share calculation assumes 119.4 million diluted weighted-average common shares outstanding.

 

The assumptions that are built into guidance for the fourth quarter and full-year 2021 regarding our pace of paid dealer acquisition, churn, and expansion activity for the relevant period are based on recent market behaviors and industry conditions. Guidance for the fourth quarter and full-year 2021 excludes the effects of significant COVID-19 resurgences, including the reintroduction of lockdowns and/or a slowed pace of recovery, or other macro-level industry issues that result in dealers and consumers materially changing their recent market behaviors or that cause us to enact measures to assist dealers, such as offering fee reductions or waivers as we have done from time to time during the COVID-19 pandemic. Guidance also excludes adjustments to the carrying value of redeemable noncontrolling interests resulting from potential changes in the redemption value of such interests, and any potential impact of foreign currency exchange gains or losses.

 

CarGurus has not reconciled its guidance for non-GAAP operating income to GAAP operating income or non-GAAP consolidated EPS to GAAP consolidated EPS because stock-based compensation, amortization of intangible assets, acquisition-related expenses, and adjustments to the carrying value of redeemable noncontrolling interests resulting from changes in the redemption value of such interests, the reconciling items between such GAAP and non-GAAP financial measures, cannot be reasonably predicted due to, as applicable, the timing, amount, valuation and number of future employee equity awards, and the uncertainty relating to the timing, frequency and effect of acquisitions and the significance of the resulting acquisition-related expenses, including adjustments to the carrying value of redeemable noncontrolling interests resulting from potential changes in the redemption value of such interests, and therefore cannot be

 


determined without unreasonable effort. For more information regarding the non-GAAP financial measures discussed in this release, please see the reconciliations of GAAP financial measures to non-GAAP financial measures and the section titled “Non-GAAP Financial Measures and Other Business Metrics” below.

Conference Call and Webcast Information

CarGurus will host a conference call and live webcast to discuss its third quarter 2021 financial results and business outlook at 5:00 p.m. Eastern Time today, November 9, 2021. To access the conference call, dial (877) 451-6152 for callers in the U.S. or Canada, or (201) 389-0879 for international callers. The webcast will be available live on the Investors section of CarGurus’ website at https://investors.cargurus.com.

An audio replay of the call will also be available to investors beginning at approximately 8:00 p.m. Eastern Time today, November 9, 2021, until 11:59 p.m. Eastern Time on November 23, 2021, by dialing (844) 512-2921 for callers in the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 13722924. In addition, an archived webcast will be available on the Investors section of CarGurus’ website at https://investors.cargurus.com.

About CarGurus

CarGurus (Nasdaq: CARG) 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. CarGurus is the most visited automotive shopping site in the U.S. (source: Comscore Media Metrix® Multi-Platform, Automotive – Information/Resources, Total Visits, Q3 2021, U.S.).

CarGurus also operates online marketplaces under the CarGurus brand in Canada and the United Kingdom. In the United States and the United Kingdom, CarGurus also operates the Autolist and PistonHeads online marketplaces, respectively, as independent brands.

To learn more about CarGurus, visit www.cargurus.com and for more information about CarOffer, visit www.caroffer.com.

CarGurus® is a registered trademark of CarGurus, Inc., and CarOffer® is a registered trademark of CarOffer, LLC. All other product names, trademarks and registered trademarks are property of their respective owners.

© 2021 CarGurus, Inc., All Rights Reserved.

Cautionary Language Concerning Forward-Looking Statements

This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our future financial and business performance for the fourth quarter and full-year 2021, our belief that the presentation of non-GAAP financial measures and other business metrics is helpful to our investors, our business and strategy and the impact of the COVID-19 pandemic and other macro-level issues on our industry, business and financial results, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “guide,” “intend,” “likely,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our growth and ability to grow our revenue, our relationships with dealers, competition in the markets in which we operate, market growth, our ability to innovate, our ability to realize benefits from our acquisitions and successfully implement the integration strategies in connection therewith, natural disasters, epidemics or pandemics, like COVID-19 that has negatively impacted our business, our ability to operate in compliance with applicable laws, as well as other risks and uncertainties as may be detailed from time to time in our Annual Reports on

 


Form 10-K and Quarterly Reports on Form 10-Q and other reports we file with the Securities and Exchange Commission. Moreover, we operate in very competitive and rapidly changing environments. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee that future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

 

 

 

 


Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

At
September 30,
2021

 

 

At
December 31,
2020

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

231,091

 

 

$

190,299

 

Investments

 

 

90,000

 

 

 

100,000

 

Accounts receivable, net of allowance for doubtful accounts of $602
   and $616, respectively

 

 

85,182

 

 

 

18,235

 

Inventory

 

 

6,395

 

 

 

 

Prepaid expenses, prepaid income taxes and other current assets

 

 

13,183

 

 

 

12,385

 

Deferred contract costs

 

 

9,905

 

 

 

10,807

 

Restricted cash

 

 

5,753

 

 

 

250

 

Total current assets

 

 

441,509

 

 

 

331,976

 

Property and equipment, net

 

 

29,569

 

 

 

27,483

 

Intangible assets, net

 

 

92,421

 

 

 

10,862

 

Goodwill

 

 

155,707

 

 

 

29,129

 

Operating lease right-of-use assets

 

 

63,841

 

 

 

60,835

 

Restricted cash

 

 

10,377

 

 

 

10,377

 

Deferred tax assets

 

 

13,741

 

 

 

19,774

 

Deferred contract costs, net of current portion

 

 

6,866

 

 

 

9,189

 

Other non-current assets

 

 

5,886

 

 

 

2,673

 

Total assets

 

$

819,917

 

 

$

502,298

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

55,340

 

 

$

21,563

 

Accrued expenses, accrued income taxes and other current liabilities

 

 

21,922

 

 

 

24,751

 

Deferred revenue

 

 

12,517

 

 

 

9,137

 

Operating lease liabilities

 

 

12,671

 

 

 

11,085

 

Total current liabilities

 

 

102,450

 

 

 

66,536

 

Operating lease liabilities

 

 

61,013

 

 

 

58,810

 

Deferred tax liabilities

 

 

19

 

 

 

291

 

Other non–current liabilities

 

 

12,546

 

 

 

3,075

 

Total liabilities

 

 

176,028

 

 

 

128,712

 

Redeemable noncontrolling interest

 

 

54,633

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized;
   no shares issued and outstanding

 

 

 

 

 

 

Class A common stock, $0.001 par value per share; 500,000,000 shares
   authorized; 101,003,874 and 94,310,309 shares issued and outstanding
   at September 30, 2021 and December 31, 2020, respectively

 

 

101

 

 

 

94

 

Class B common stock, $0.001 par value per share; 100,000,000 shares
   authorized; 16,470,842 and 19,076,500 shares issued and outstanding
   at September 30, 2021 and December 31, 2020, respectively

 

 

16

 

 

 

19

 

Additional paid-in capital

 

 

379,808

 

 

 

242,181

 

Retained earnings

 

 

209,024

 

 

 

129,412

 

Accumulated other comprehensive income

 

 

307

 

 

 

1,880

 

Total stockholders’ equity

 

 

589,256

 

 

 

373,586

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

 

$

819,917

 

 

$

502,298

 

 

 


Unaudited Condensed Consolidated Income Statements

(in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

222,915

 

 

$

147,472

 

 

$

612,031

 

 

$

399,898

 

Cost of revenue(1)

 

 

60,033

 

 

 

9,762

 

 

 

134,408

 

 

 

31,252

 

Gross profit

 

 

162,882

 

 

 

137,710

 

 

 

477,623

 

 

 

368,646

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

66,626

 

 

 

57,618

 

 

 

200,935

 

 

 

189,796

 

Product, technology, and development

 

 

26,539

 

 

 

20,758

 

 

 

79,333

 

 

 

65,729

 

General and administrative

 

 

20,414

 

 

 

14,279

 

 

 

67,095

 

 

 

44,297

 

Depreciation and amortization

 

 

9,227

 

 

 

1,488

 

 

 

25,916

 

 

 

4,529

 

Total operating expenses

 

 

122,806

 

 

 

94,143

 

 

 

373,279

 

 

 

304,351

 

Income from operations

 

 

40,076

 

 

 

43,567

 

 

 

104,344

 

 

 

64,295

 

Other income, net

 

 

143

 

 

 

205

 

 

 

426

 

 

 

1,407

 

Income before income taxes

 

 

40,219

 

 

 

43,772

 

 

 

104,770

 

 

 

65,702

 

Provision for income taxes

 

 

10,952

 

 

 

11,209

 

 

 

28,556

 

 

 

13,312

 

Consolidated net income

 

 

29,267

 

 

 

32,563

 

 

 

76,214

 

 

 

52,390

 

Net income (loss) attributable to redeemable noncontrolling interest

 

 

68

 

 

 

 

 

 

(3,398

)

 

 

 

Net income attributable to common stockholders

 

$

29,199

 

 

$

32,563

 

 

$

79,612

 

 

$

52,390

 

Net income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.25

 

 

$

0.29

 

 

$

0.68

 

 

$

0.46

 

Diluted

 

$

0.24

 

 

$

0.29

 

 

$

0.66

 

 

$

0.46

 

Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

117,412,164

 

 

 

113,027,995

 

 

 

116,955,188

 

 

 

112,707,003

 

Diluted

 

 

120,438,373

 

 

 

113,966,863

 

 

 

119,051,228

 

 

 

113,732,616

 

(1) Includes depreciation and amortization expense for the three months ended September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020 of $1,429, $944, $3,571 and $4,250, respectively.

 

 

 

 


Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

29,267

 

 

$

32,563

 

 

$

76,214

 

 

$

52,390

 

Adjustments to reconcile consolidated net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

10,656

 

 

 

2,432

 

 

 

29,487

 

 

 

8,779

 

Currency (gain) loss on foreign denominated transactions

 

 

(42

)

 

 

59

 

 

 

(72

)

 

 

(32

)

Deferred taxes

 

 

3,438

 

 

 

10,074

 

 

 

5,774

 

 

 

14,769

 

Provision for doubtful accounts

 

 

277

 

 

 

84

 

 

 

727

 

 

 

1,742

 

Stock-based compensation expense

 

 

13,804

 

 

 

11,028

 

 

 

42,551

 

 

 

34,403

 

Amortization of deferred contract costs

 

 

3,189

 

 

 

2,954

 

 

 

9,643

 

 

 

8,595

 

Impairment of website development costs

 

 

2,351

 

 

 

 

 

 

2,351

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(3,613

)

 

 

301

 

 

 

(51,595

)

 

 

5,954

 

Inventory

 

 

(4,057

)

 

 

 

 

 

(4,057

)

 

 

 

Prepaid expenses, prepaid income taxes, and other assets

 

 

1,048

 

 

 

4,269

 

 

 

(2,970

)

 

 

7,104

 

Deferred contract costs

 

 

(1,424

)

 

 

(2,848

)

 

 

(6,522

)

 

 

(6,922

)

Accounts payable

 

 

9,215

 

 

 

6,169

 

 

 

24,548

 

 

 

(19,745

)

Accrued expenses, accrued income taxes, and other liabilities

 

 

(10,772

)

 

 

5,860

 

 

 

4,808

 

 

 

1,726

 

Deferred revenue

 

 

(599

)

 

 

1,475

 

 

 

3,390

 

 

 

(313

)

Lease obligations

 

 

990

 

 

 

(542

)

 

 

786

 

 

 

356

 

Net cash provided by operating activities

 

 

53,728

 

 

 

73,878

 

 

 

135,063

 

 

 

108,806

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(263

)

 

 

(161

)

 

 

(4,935

)

 

 

(2,732

)

Capitalization of website development costs

 

 

(2,036

)

 

 

(1,350

)

 

 

(4,145

)

 

 

(3,045

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

(52

)

 

 

(64,273

)

 

 

(21,056

)

Investments in certificates of deposit

 

 

(45,000

)

 

 

 

 

 

(90,000

)

 

 

 

Maturities of certificates of deposit

 

 

40,000

 

 

 

43,000

 

 

 

100,000

 

 

 

111,692

 

Net cash (used in) provided by investing activities

 

 

(7,299

)

 

 

41,437

 

 

 

(63,353

)

 

 

84,859

 

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

139

 

 

 

66

 

 

 

537

 

 

 

995

 

Payment of finance lease obligations

 

 

(16

)

 

 

(10

)

 

 

(29

)

 

 

(28

)

Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options

 

 

(3,106

)

 

 

(2,922

)

 

 

(11,314

)

 

 

(8,708

)

Repayment of line of credit

 

 

 

 

 

 

 

 

(14,250

)

 

 

 

Net cash used in financing activities

 

 

(2,983

)

 

 

(2,866

)

 

 

(25,056

)

 

 

(7,741

)

Impact of foreign currency on cash, cash equivalents, and restricted cash

 

 

(224

)

 

 

147

 

 

 

(359

)

 

 

171

 

Net increase in cash, cash equivalents, and restricted cash

 

 

43,222

 

 

 

112,596

 

 

 

46,295

 

 

 

186,095

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

203,999

 

 

 

144,222

 

 

 

200,926

 

 

 

70,723

 

Cash, cash equivalents, and restricted cash at end of period

 

$

247,221

 

 

$

256,818

 

 

$

247,221

 

 

$

256,818

 

 

 

 


Unaudited Reconciliation of Marketplace Subscription Revenue

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

United States

 

$

134,261

 

 

$

121,814

 

 

$

400,377

 

 

$

330,295

 

International

 

 

10,328

 

 

 

8,139

 

 

 

28,017

 

 

 

21,477

 

Total

 

$

144,589

 

 

$

129,953

 

 

$

428,394

 

 

$

351,772

 

 

 

Unaudited Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and GAAP Operating Margin to Non-GAAP Operating Margin

(in thousands, except percentages)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

GAAP operating income

 

$

40,076

 

 

$

43,567

 

 

$

104,344

 

 

$

64,295

 

Stock-based compensation expense

 

 

15,169

 

 

 

11,030

 

 

 

53,102

 

 

 

34,634

 

Amortization of intangible assets

 

 

7,854

 

 

 

495

 

 

 

22,358

 

 

 

1,412

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

709

 

 

 

968

 

Restructuring expenses(1)

 

 

 

 

 

 

 

 

 

 

 

3,514

 

Non-GAAP operating income

 

$

63,099

 

 

$

55,092

 

 

$

180,513

 

 

$

104,823

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

 

18

%

 

 

30

%

 

 

17

%

 

 

16

%

Non-GAAP operating margin

 

 

28

%

 

 

37

%

 

 

29

%

 

 

26

%

(1) Excludes stock-based compensation expense of $753 for the nine months ended September 30, 2020 related to the expense reduction plan approved by our Board of Directors on April 13, 2020 to address the impact of the COVID-19 pandemic on our business (the “Expense Reduction Plan”), as the amount is already included within the stock-based compensation line item.

 

 

 

 

 

 


Unaudited Reconciliation of GAAP Consolidated Net Income to Non-GAAP Net Income Attributable to Common Stockholders

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

GAAP consolidated net income

 

$

29,267

 

 

$

32,563

 

 

$

76,214

 

 

$

52,390

 

Stock-based compensation expense, net of tax(1)

 

 

11,984

 

 

 

8,714

 

 

 

41,951

 

 

 

27,361

 

Change in tax provision from stock-based compensation expense(2)

 

 

410

 

 

 

175

 

 

 

1,033

 

 

 

(311

)

Amortization of intangible assets

 

 

7,854

 

 

 

495

 

 

 

22,358

 

 

 

1,412

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

709

 

 

 

968

 

Restructuring expenses(3)

 

 

 

 

 

 

 

 

 

 

 

3,514

 

Non-GAAP consolidated net income

 

 

49,515

 

 

 

41,947

 

 

 

142,265

 

 

 

85,334

 

Net income attributable to redeemable noncontrolling interest

 

 

(3,172

)

 

 

 

 

 

(7,311

)

 

 

 

Non-GAAP net income attributable to common stockholders

 

$

46,343

 

 

$

41,947

 

 

$

134,954

 

 

$

85,334

 

Non-GAAP net income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.39

 

 

$

0.37

 

 

$

1.15

 

 

$

0.76

 

Diluted

 

$

0.38

 

 

$

0.37

 

 

$

1.13

 

 

$

0.75

 

GAAP Shares used in non-GAAP per share calculations

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

117,412

 

 

 

113,028

 

 

 

116,955

 

 

 

112,707

 

Diluted

 

 

120,438

 

 

 

113,967

 

 

 

119,051

 

 

 

113,733

 

(1) The stock-based compensation amounts reflected in the table above are tax effected at the U.S. federal statutory tax rate of 21%.

 

(2) This adjustment reflects the tax effect of differences between tax deductions related to stock compensation and the corresponding financial statement expense.

 

(3) Excludes stock-based compensation expense related to the Expense Reduction Plan of $753 for the nine months ended September 30, 2020 as the amount is already included within the stock-based compensation line items.

 

 

Unaudited Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Profit Margin to Non-GAAP Gross Profit Margin

(in thousands, except percentages)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

222,915

 

 

$

147,472

 

 

$

612,031

 

 

$

399,898

 

Cost of revenue

 

 

60,033

 

 

 

9,762

 

 

 

134,408

 

 

 

31,252

 

Gross profit

 

 

162,882

 

 

 

137,710

 

 

 

477,623

 

 

 

368,646

 

Stock-based compensation expense included in Cost of revenue

 

 

110

 

 

 

57

 

 

 

311

 

 

 

241

 

Acquisition-related expenses included in Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

22

 

Restructuring expenses included in Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

1,051

 

Non-GAAP gross profit

 

$

162,992

 

 

$

137,767

 

 

$

477,934

 

 

$

369,960

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit margin

 

 

73

%

 

 

93

%

 

 

78

%

 

 

92

%

Non-GAAP gross profit margin

 

 

73

%

 

 

93

%

 

 

78

%

 

 

93

%

 

 


 

Unaudited Reconciliation of GAAP Expense to Non-GAAP Expense

(in thousands)

 

 

Three Months Ended
September 30,
 

 

 

2021

 

 

2020

 

 

GAAP expense

 

 

Stock-based
compensation
expense

 

 

Amortization of
intangible assets

 

 

Acquisition-related expenses

 

 

Restructuring expenses

 

 

Non-GAAP
expense

 

 

GAAP expense

 

 

Stock-based
compensation
expense

 

 

Amortization of
intangible assets

 

 

Acquisition-related expenses

 

 

Restructuring expenses

 

 

Non-GAAP
expense

 

Cost of revenue

$

60,033

 

 

$

(110

)

 

$

 

 

$

 

 

$

 

 

$

59,923

 

 

$

9,762

 

 

$

(57

)

 

$

 

 

$

 

 

$

 

 

$

9,705

 

S&M

 

66,626

 

 

 

(2,717

)

 

 

 

 

 

 

 

 

 

 

 

63,909

 

 

 

57,618

 

 

 

(2,450

)

 

 

 

 

 

 

 

 

 

 

 

55,168

 

P,T&D(1)

 

26,539

 

 

 

(5,583

)

 

 

 

 

 

 

 

 

 

 

 

20,956

 

 

 

20,758

 

 

 

(5,140

)