8-K
0001494259false00014942592022-02-242022-02-24

 

 

 

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): February 24, 2022

 

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 February 24, 2022, CarGurus, Inc. (the “Company”) announced its financial results for the quarter and year ended December 31, 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 February 24, 2022, reporting its financial results for the quarter and year ended December 31, 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: February 24, 2022

 

By:

/s/ Scot Fredo

 

 

 

Name: Scot Fredo

 

 

 

Title: Chief Financial Officer

 

 


EX-99.1

 

Exhibit 99.1

https://cdn.kscope.io/942e860bdcfaed5267f49aeb82554cf9-img239243378_0.jpg 

 

CarGurus Announces Fourth Quarter and Full-Year 2021 Results

Fourth Quarter Highlights:

Total revenue of $339.3 million, an increase of 124% year-over-year
GAAP operating income of $43.9 million; non-GAAP operating income of $76.3 million
GAAP consolidated net income of $34.2 million; non-GAAP consolidated net income of $61.5 million
GAAP net income attributable to CarGurus, Inc. of $29.6 million; non-GAAP net income attributable to common stockholders of $50.4 million
Consolidated Adjusted EBITDA of $80.3 million; Adjusted EBITDA of $67.6 million

Full-Year Year Highlights:

Total revenue of $951.4 million, an increase of 73% year-over-year
GAAP operating income of $148.3 million; non-GAAP operating income of $256.8 million
GAAP consolidated net income of $110.4 million; non-GAAP consolidated net income of $203.8 million
GAAP net income attributable to CarGurus, Inc. of $109.2 million; non-GAAP net income attributable to common stockholders of $185.4 million
Cash, cash equivalents and short-term investments of $321.9 million and no debt
Consolidated Adjusted EBITDA of $270.3 million; Adjusted EBITDA of $249.5 million

CAMBRIDGE, MA: February 24, 2022 — CarGurus, Inc. (Nasdaq: CARG), a multinational, online automotive platform for buying and selling vehicles, today announced financial results for the fourth quarter and full-year ended December 31, 2021.

"2021 was a transformative year for CarGurus as we evolved from a listings business to a transaction-enabled marketplace providing valuable cross-platform synergies to both our dealer partners and our industry leading consumer audience," said Jason Trevisan, Chief Executive Officer of CarGurus. "This was made possible with the acquisition of CarOffer, the launch of CarGurus Instant Max Cash Offer and the progression of our digital retail capabilities. These milestones were integral to the development of our end-to-end transaction-enabled marketplace. I’m thrilled to share that with these sizable new growth vectors and through the remarkable resiliency of our foundational listings business, CarGurus achieved exceptional results and exceeded our forecasted guidance for the fourth quarter and full-year 2021."

Revenue Presentation Update and Performance:

 

CarGurus' consolidated income statements have been disaggregated to reflect revenues and costs of revenue between the Marketplace, Wholesale, and Product components of its business. CarGurus believes this reorganization provides greater transparency of its business as well as more accurately reflects the revenue streams from its new growth vectors.

Fourth Quarter 2021:

Total revenue was $339.3 million, an increase of 124% compared to $151.6 million in the fourth quarter of 2020. Marketplace revenue was $160.8 million, Wholesale revenue was $82.6 million and Product revenue was $96.0 million in the fourth quarter 2021.

 


Full-Year 2021:

Total revenue was $951.4 million, an increase of 73% compared to $551.5 million in 2020. Marketplace revenue was $636.9 million, Wholesale revenue was $195.1 million and Product revenue was $119.3 million in 2021.

Operating Income

Fourth Quarter 2021:

GAAP operating income was $43.9 million, an increase of 31% compared to $33.5 million in the fourth quarter of 2020.

Non-GAAP operating income was $76.3 million, an increase of 63% compared to $46.7 million in the fourth quarter of 2020.

Full-Year 2021:

GAAP operating income was $148.3 million, an increase of 52% compared to $97.8 million in 2020.

Non-GAAP operating income was $256.8 million, an increase of 70% compared to $151.5 million in 2020.

Consolidated Net Income, Net (Loss) Income Attributable to Common Stockholders, Consolidated Adjusted EBITDA, & Adjusted EBITDA

Fourth Quarter 2021:

GAAP consolidated net income was $34.2 million during the quarter ended December 31, 2021, compared to $25.2 million during the quarter ended December 31, 2020.

Non-GAAP consolidated net income was $61.5 million during the quarter ended December 31, 2021, compared to $36.5 million during the quarter ended December 31, 2020.

GAAP net (loss) income attributable to common stockholders was ($79.8) million or ($0.68) per fully diluted share, during the quarter ended December 31, 2021, compared to $25.2 million, or $0.22 per fully diluted share, during the quarter ended December 31, 2020.

Non-GAAP net income attributable to common stockholders was $50.4 million, or $0.43 per fully diluted share, during the quarter ended December 31, 2021, compared to $36.5 million, or $0.32 per fully diluted share, during the quarter ended December 31, 2020.

Consolidated Adjusted EBITDA, a non-GAAP metric, was $80.3 million for the quarter ended December 31, 2021, compared to $48.6 million for the quarter ended December 31, 2020.

Adjusted EBITDA, a non-GAAP metric, was $67.6 million for the quarter ended December 31, 2021, compared to $48.6 million for the quarter ended December 31, 2020.

Full-Year 2021:

GAAP consolidated net income was $110.4 million during 2021, compared to $77.6 million during 2020.

Non-GAAP consolidated net income was $203.8 million during 2021, compared to $121.8 million during 2020.

GAAP net (loss) income attributable to common stockholders was ($0.2) million, or ($0.00) per fully diluted share, during 2021, compared to $77.6 million, or $0.68 per fully diluted share, during 2020.

Non-GAAP net income attributable to common stockholders was $185.4 million, or $1.58 per fully diluted share, during 2021, compared to $121.8 million, or $1.07 per fully diluted share, during 2020.

Consolidated Adjusted EBITDA, a non-GAAP metric, was $270.3 million in 2021, compared to $160.8 million in 2020.

 


Adjusted EBITDA, a non-GAAP metric, was $249.5 million in 2021, compared to $160.8 million in 2020.

Balance Sheet and Cash Flow

As of December 31, 2021, CarGurus had cash, cash equivalents and short-term investments of $321.9 million and no debt.

CarGurus used ($36.8) million in cash from operations and ($41.6) million in free cash flow, a non-GAAP metric, during the fourth quarter of 2021, compared to having generated $47.9 million in cash from operations and $46.2 million in free cash flow during the fourth quarter of 2020. For the full-year 2021, CarGurus generated $98.3 million in cash from operations and $84.4 million in free cash flow compared to having generated $156.7 million in cash from operations and $149.2 million in free cash flow in 2020.

Fourth Quarter Business Metrics(1)

U.S. revenue was $327.9 million in the fourth quarter of 2021, an increase of 128% compared to $143.7 million in the fourth quarter of 2020.

GAAP operating income in the U.S. was $47.0 million, an increase of 21% compared to $38.8 million in the fourth quarter of 2020.

International revenue was $11.5 million in the fourth quarter of 2021, an increase of 45% compared to $7.9 million in the fourth quarter of 2020.

GAAP operating loss in International markets was ($3.1) million, a reduction in loss of 42% compared to a loss of ($5.3) million in the fourth quarter of 2020.

Total paying dealers were 30,630 at December 31, 2021, a net decrease of one dealer compared to 30,631 at December 31, 2020. Of the total paying dealers at December 31, 2021, U.S. and International accounted for 23,860 and 6,770, respectively, compared to 23,934 and 6,697, respectively, at December 31, 2020.

Quarterly Average Revenue per Subscribing Dealer (“QARSD”) in the U.S. was $5,633 as of December 31, 2021, an increase of 6% compared to $5,304 as of December 31, 2020.

QARSD in International markets was $1,546 as of December 31, 2021, an increase of 46% compared to $1,060 as of December 31, 2020.

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

o
U.S. average monthly unique users were 28.6 million, a decrease of (15%) compared to 33.8 million in the fourth quarter of 2020.
o
U.S. average monthly sessions were 74.3 million, a decrease of (10%) compared to 82.3 million in the fourth quarter of 2020.
o
International average monthly unique users were 6.9 million, a decrease of (4%) compared to 7.1 million in the fourth quarter of 2020.
o
International average monthly sessions were 15.8 million, a decrease of (3%) compared to 16.3 million in the fourth quarter of 2020.

 

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

 


First Quarter 2022 Guidance

CarGurus anticipates total revenue, non-GAAP operating income, and non-GAAP earnings per share to be in the following ranges for the first quarter 2022:
 

Total revenue

$390 million to $410 million

Non-GAAP operating income

$59 million to $65 million

Non-GAAP EPS

$0.31 to $0.33

 

The first quarter 2022 non-GAAP earnings per share calculation assumes 118.5 million diluted weighted-average common shares outstanding.

 

The assumptions that are built into guidance for the first quarter 2022 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 first quarter 2022 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 fourth quarter and full-year ended 2021 financial results and business outlook at 5:00 p.m. Eastern Time today, February 24, 2022. 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, February 24, 2022, until 11:59 p.m. Eastern Time on March 10, 2022, by dialing (844) 512-2921 for callers in the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 13725601. 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 it 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, Q4 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.

© 2022 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 first quarter 2022, the development of our end-to-end transaction-enabled marketplace, the disaggregation of revenue and cost of revenue within our consolidated income statements, 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)

 

 

 

As of December 31,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

231,944

 

 

$

190,299

 

Investments

 

 

90,000

 

 

 

100,000

 

Accounts receivable, net of allowance for doubtful accounts of $420 and
   $616, respectively

 

 

189,324

 

 

 

18,235

 

Inventory

 

 

19,656

 

 

 

 

Prepaid expenses, prepaid income taxes and other current assets

 

 

16,430

 

 

 

12,385

 

Deferred contract costs

 

 

9,045

 

 

 

10,807

 

Restricted cash

 

 

6,709

 

 

 

250

 

Total current assets

 

 

563,108

 

 

 

331,976

 

Property and equipment, net

 

 

32,210

 

 

 

27,483

 

Intangible assets, net

 

 

83,915

 

 

 

10,862

 

Goodwill

 

 

158,287

 

 

 

29,129

 

Operating lease right-of-use assets

 

 

60,609

 

 

 

60,835

 

Restricted cash

 

 

9,627

 

 

 

10,377

 

Deferred tax assets

 

 

13,378

 

 

 

19,774

 

Deferred contract costs, net of current portion

 

 

5,867

 

 

 

9,189

 

Other non-current assets

 

 

4,573

 

 

 

2,673

 

Total assets

 

$

931,574

 

 

$

502,298

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

66,153

 

 

$

21,563

 

Accrued expenses, accrued income taxes and other current liabilities

 

 

78,586

 

 

 

24,751

 

Deferred revenue

 

 

12,784

 

 

 

9,137

 

Operating lease liabilities

 

 

13,186

 

 

 

11,085

 

Total current liabilities

 

 

170,709

 

 

 

66,536

 

Operating lease liabilities

 

 

57,519

 

 

 

58,810

 

Deferred tax liabilities

 

 

58

 

 

 

291

 

Other non–current liabilities

 

 

23,639

 

 

 

3,075

 

Total liabilities

 

 

251,925

 

 

 

128,712

 

Redeemable noncontrolling interest

 

 

162,808

 

 

 

 

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; 500,000,000 shares authorized;
   101,773,034 and 94,310,309 shares issued and outstanding at
   December 31, 2021 and 2020, respectively

 

 

102

 

 

 

94

 

Class B common stock, $0.001 par value; 100,000,000 shares authorized;
   15,999,173 and 19,076,500 shares issued and outstanding at
   December 31, 2021 and 2020, respectively

 

 

16

 

 

 

19

 

Additional paid–in capital

 

 

387,868

 

 

 

242,181

 

Retained earnings

 

 

129,258

 

 

 

129,412

 

Accumulated other comprehensive (loss) income

 

 

(403

)

 

 

1,880

 

Total stockholders’ equity

 

 

516,841

 

 

 

373,586

 

Total liabilities and stockholders’ equity

 

$

931,574

 

 

$

502,298

 

 

 


Unaudited Condensed Consolidated Income Statements

(in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

$

160,759

 

 

$

151,553

 

 

$

636,942

 

 

$

551,451

 

Wholesale

 

 

82,595

 

 

 

 

 

 

195,127

 

 

 

 

Product

 

 

95,988

 

 

 

 

 

 

119,304

 

 

 

 

Total revenue

 

 

339,342

 

 

 

151,553

 

 

 

951,373

 

 

 

551,451

 

Cost of revenue(1)(2)

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

 

13,703

 

 

 

11,454

 

 

 

47,689

 

 

 

42,706

 

Wholesale

 

 

52,335

 

 

 

 

 

 

127,679

 

 

 

 

Product

 

 

93,569

 

 

 

 

 

 

118,647

 

 

 

 

Total cost of revenue

 

 

159,607

 

 

 

11,454

 

 

 

294,015

 

 

 

42,706

 

Gross profit

 

 

179,735

 

 

 

140,099

 

 

 

657,358

 

 

 

508,745

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

89,639

 

 

 

67,183

 

 

 

290,574

 

 

 

256,979

 

Product, technology, and development

 

 

27,090

 

 

 

19,997

 

 

 

106,423

 

 

 

85,726

 

General and administrative

 

 

30,583

 

 

 

17,869

 

 

 

97,678

 

 

 

62,166

 

Depreciation and amortization

 

 

(11,501

)

 

 

1,589

 

 

 

14,415

 

 

 

6,118

 

Total operating expenses

 

 

135,811

 

 

 

106,638

 

 

 

509,090

 

 

 

410,989

 

Income from operations

 

 

43,924

 

 

 

33,461

 

 

 

148,268

 

 

 

97,756

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

26

 

 

 

22

 

 

 

120

 

 

 

1,075

 

Other income (expense), net

 

 

640

 

 

 

(75

)

 

 

972

 

 

 

279

 

Total other income (expense), net

 

 

666

 

 

 

(53

)

 

 

1,092

 

 

 

1,354

 

Income before income taxes

 

 

44,590

 

 

 

33,408

 

 

 

149,360

 

 

 

99,110

 

Provision for income taxes

 

 

10,431

 

 

 

8,245

 

 

 

38,987

 

 

 

21,557

 

Consolidated net income

 

 

34,159

 

 

 

25,163

 

 

 

110,373

 

 

 

77,553

 

Net income attributable to redeemable noncontrolling interest

 

 

4,527

 

 

 

 

 

 

1,129

 

 

 

 

Net income attributable to CarGurus, Inc.

 

$

29,632

 

 

$

25,163

 

 

$

109,244

 

 

$

77,553

 

Accretion of redeemable noncontrolling interest to redemption value

 

 

109,398

 

 

 

 

 

 

109,398

 

 

 

 

Net (loss) income attributable to common stockholders

 

$

(79,766

)

 

$

25,163

 

 

$

(154

)

 

$

77,553

 

Net (loss) income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.68

)

 

$

0.22

 

 

$

(0.00

)

 

$

0.69

 

Diluted

 

$

(0.68

)

 

$

0.22

 

 

$

(0.00

)

 

$

0.68

 

Weighted–average number of shares of common
   stock used in computing net (loss) income per share
   attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

117,696,590

 

 

 

113,386,809

 

 

 

117,142,062

 

 

 

112,854,524

 

Diluted

 

 

117,696,590

 

 

 

114,291,136

 

 

 

117,142,062

 

 

 

113,849,815

 

(1) Includes depreciation and amortization expense for the three months ended December 31, 2021 and 2020 and for the years ended December 31, 2021 and 2020 of $22,490, $974, $26,061 and $5,224, respectively.

 

(2) We have recorded a $14.9 million adjustment related to the presentation of amortization of developed technology, acquired in the CarOffer acquisition on January 14, 2021, in our consolidated statement of operations for the three and twelve months ended December 31, 2021. We had previously recorded amortization expense as a component of operating expenses but given the underlying nature of the asset we believe the amortization more closely aligns with cost of goods sold. We assessed the materiality of this reclass on the historical financial statements, individually and in aggregate, and concluded the effect of the reclass was not material to our consolidated financial statements for any of the periods.

 

 

 

 


Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

34,159

 

 

$

25,163

 

 

$

110,373

 

 

$

77,553

 

Adjustments to reconcile consolidated net income to net cash (used in)
     provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

10,989

 

 

 

1,412

 

 

 

40,476

 

 

 

10,191

 

Currency loss (gain) on foreign denominated transactions

 

 

2

 

 

 

55

 

 

 

(70

)

 

 

23

 

Deferred taxes

 

 

389

 

 

 

7,466

 

 

 

6,163

 

 

 

22,235

 

Provision for doubtful accounts

 

 

272

 

 

 

188

 

 

 

999

 

 

 

1,930

 

Stock-based compensation expense

 

 

10,974

 

 

 

10,687

 

 

 

53,525

 

 

 

45,090

 

Amortization of deferred contract costs

 

 

3,010

 

 

 

3,010

 

 

 

12,653

 

 

 

11,605

 

Impairment of long-lived assets

 

777

 

 

 

1,151

 

 

 

3,128

 

 

 

1,151

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(123,176

)

 

 

(2,065

)

 

 

(174,771

)

 

 

3,889

 

Inventory

 

 

(13,261

)

 

 

 

 

 

(17,318

)

 

 

 

Prepaid expenses, prepaid income taxes, and other assets

 

 

(2,098

)

 

 

(3,620

)

 

 

(5,068

)

 

 

3,484

 

Deferred contract costs

 

 

(1,192

)

 

 

(4,456

)

 

 

(7,714

)

 

 

(11,378

)

Accounts payable

 

 

10,849

 

 

 

4,668

 

 

 

35,397

 

 

 

(15,077

)

Accrued expenses, accrued income taxes, and other liabilities

 

 

31,009

 

 

 

5,724

 

 

 

35,817

 

 

 

7,450

 

Deferred revenue

 

 

271

 

 

 

(548

)

 

 

3,661

 

 

 

(861

)

Lease obligations

 

 

255

 

 

 

(898

)

 

 

1,041

 

 

 

(542

)

Net cash (used in) provided by operating activities

 

 

(36,771

)

 

 

47,937

 

 

 

98,292

 

 

 

156,743

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,778

)

 

 

(220

)

 

 

(7,713

)

 

 

(2,952

)

Capitalization of website development costs

 

 

(2,018

)

 

 

(1,534

)

 

 

(6,163

)

 

 

(4,579

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

 

 

 

(64,273

)

 

 

(21,056

)

Investments in certificates of deposit

 

 

(30,000

)

 

 

(100,000

)

 

 

(120,000

)

 

 

(100,000

)

Maturities of certificates of deposit

 

 

30,000

 

 

 

 

 

 

130,000

 

 

 

111,692

 

Net cash used in investing activities

 

 

(4,796

)

 

 

(101,754

)

 

 

(68,149

)

 

 

(16,895

)

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

126

 

 

 

141

 

 

 

663

 

 

 

1,136

 

Payment of finance lease obligations

 

 

(10

)

 

 

(9

)

 

 

(39

)

 

 

(37

)

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

 

 

(4,074

)

 

 

(2,476

)

 

 

(15,388

)

 

 

(11,184

)

Repayment of line of credit

 

 

 

 

 

 

 

 

(14,250

)

 

 

 

Payments received in advance from third-party payment processor

 

 

46,822

 

 

 

 

 

 

46,822

 

 

 

 

Net cash provided by (used in) financing activities

 

 

42,864

 

 

 

(2,344

)

 

 

17,808

 

 

 

(10,085

)

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

 

 

(238

)

 

 

269

 

 

 

(597

)

 

 

440

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

1,059

 

 

 

(55,892

)

 

 

47,354

 

 

 

130,203

 

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

 

 

247,221

 

 

 

256,818

 

 

 

200,926

 

 

 

70,723

 

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

 

$

248,280

 

 

$

200,926

 

 

$

248,280

 

 

$

200,926

 

 

 

 


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

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

GAAP operating income

 

$

43,924

 

 

$

33,461

 

 

$

148,268

 

 

$

97,756

 

Stock-based compensation expense

 

 

24,608

 

 

 

10,687

 

 

 

77,710

 

 

 

45,321

 

Amortization of acquired intangible assets

 

 

7,794

 

 

 

581

 

 

 

30,152

 

 

 

1,993

 

Acquisition-related expenses

 

 

 

 

 

1,938

 

 

 

709

 

 

 

2,906

 

Restructuring expenses(1)

 

 

 

 

 

 

 

 

 

 

 

3,514

 

Non-GAAP operating income

 

$

76,326

 

 

$

46,667

 

 

$

256,839

 

 

$

151,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

 

13

%

 

 

22

%

 

 

16

%

 

 

18

%

Non-GAAP operating margin

 

 

22

%

 

 

31

%

 

 

27

%

 

 

27

%

(1) Excludes stock-based compensation expense of $753 for the year ended December 31, 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

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

GAAP consolidated net income

 

$

34,159

 

 

$

25,163

 

 

$

110,373

 

 

$

77,553

 

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

 

 

19,440

 

 

 

8,443

 

 

 

61,391

 

 

 

35,804

 

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

 

 

146

 

 

 

350

 

 

 

1,179

 

 

 

39

 

Amortization of acquired intangible assets

 

 

7,794

 

 

 

581

 

 

 

30,152

 

 

 

1,993

 

Acquisition-related expenses

 

 

 

 

 

1,938

 

 

 

709

 

 

 

2,906

 

Restructuring expenses(3)

 

 

 

 

 

 

 

 

 

 

 

3,514

 

Non-GAAP consolidated net income

 

 

61,539

 

 

 

36,475

 

 

 

203,804

 

 

 

121,809

 

Net income attributable to redeemable noncontrolling interest

 

 

(11,094

)

 

 

 

 

 

(18,405

)

 

 

 

Non-GAAP net income attributable to common stockholders

 

$

50,445

 

 

$

36,475

 

 

$

185,399

 

 

$

121,809

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.43

 

 

$

0.32

 

 

$

1.58

 

 

$

1.08

 

Diluted

 

$

0.43

 

 

$

0.32

 

 

$

1.58

 

 

$

1.07

 

Shares used in Non-GAAP per share calculations

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

117,697

 

 

 

113,387

 

 

 

117,142

 

 

 

112,855

 

Diluted

 

 

117,697

 

 

 

114,291

 

 

 

117,142

 

 

 

113,850

 

(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-based compensation and the corresponding financial statement expense.

 

(3) Excludes stock-based compensation expense of $753 for the year ended December 31, 2020 related to the Expense Reduction Plan, as the amount is already included within the stock-based compensation line item.

 

 

 

 

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

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

339,342

 

 

$

151,553

 

 

$

951,373

 

 

$

551,451

 

Cost of revenue

 

 

159,607

 

 

 

11,454

 

 

 

294,015

 

 

 

42,706

 

Gross profit

 

 

179,735

 

 

 

140,099

 

 

 

657,358

 

 

 

508,745

 

Stock-based compensation expense included in Cost of revenue

 

 

106

 

 

 

52

 

 

 

417

 

 

 

293

 

Acquisition-related expenses included in Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

22

 

Restructuring expenses included in Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

1,051

 

Amortization of acquired intangible assets included in Cost of revenue(1)

 

 

20,806

 

 

 

 

 

 

20,806

 

 

 

 

Non-GAAP gross profit

 

$

200,647

 

 

$

140,151

 

 

$

678,581

 

 

$

510,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit margin

 

 

53

%

 

 

92

%

 

 

69

%

 

 

92

%

Non-GAAP gross profit margin

 

 

59

%

 

 

92

%

 

 

71

%

 

 

93

%

(1) We have recorded a $14.9 million adjustment related to the presentation of amortization of developed technology, acquired in the CarOffer acquisition on January 14, 2021, in our consolidated statement of operations for the three and twelve months ended December 31, 2021. We had previously recorded amortization expense as a component of operating expenses but given the underlying nature of the asset we believe the amortization more closely aligns with cost of goods sold. We assessed the materiality of this reclass on the historical financial statements, individually and in aggregate, and concluded the effect of the reclass was not material to our consolidated financial statements for any of the periods.

 

 

 


 

Unaudited Reconciliation of GAAP Expense to Non-GAAP Expense

(in thousands)

 

 

 

Three Months Ended
December 31,