0000950170-22-002023 | 10-K | XBRL Viewer

Print Document View Excel Document

Consolidated Statements of 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, 2018	$ 194,111			$ 90	$ 21	$ 184,216	$ 9,713	$ 71
Beginning balance, Shares at Dec. 31, 2018				89,728,223	20,702,084
Net income (loss)	42,146						42,146
Stock–based compensation expense	35,682					35,682
Issuance of common stock upon exercise of stock options	1,807					1,807
Issuance of common stock upon exercise of stock options, Shares				838,928
Issuance of common stock upon vesting of restricted stock units				$ 1		(1)
Issuance of common stock upon vesting of restricted stock units, Shares				1,317,736
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(16,470)					(16,470)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares		(452,678)		(452,678)
Conversion of common stock				$ 1
Conversion of common stock, shares issued				387,440
Conversion of common stock, shares converted					(387,440)
Conversion of common stock, value					$ (1)
Foreign currency translation adjustment	(421)							(421)
Ending balance at Dec. 31, 2019	256,855			$ 92	$ 20	205,234	51,859	(350)
Ending balance, Shares at Dec. 31, 2019				91,819,649	20,314,644
Net income (loss)	77,553						77,553
Stock–based compensation expense	46,996					46,996
Issuance of common stock upon exercise of stock options	1,136					1,136
Issuance of common stock upon exercise of stock options, Shares				352,212
Issuance of common stock upon vesting of restricted stock units				$ 1		(1)
Issuance of common stock upon vesting of restricted stock units, Shares				1,347,464
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(11,184)					(11,184)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares		(447,160)		(447,160)
Conversion of common stock				$ 1
Conversion of common stock, shares issued				1,238,144
Conversion of common stock, shares converted					(1,238,144)
Conversion of common stock, value					$ (1)
Foreign currency translation adjustment	2,230							2,230
Ending balance at Dec. 31, 2020	373,586			$ 94	$ 19	242,181	129,412	1,880
Ending balance, Shares at Dec. 31, 2020		94,310,309	19,076,500	94,310,309	19,076,500
Net income (loss)	109,244						109,244
Redeemable noncontrolling interest, net income	1,129
Stock–based compensation expense	56,772					56,772
Issuance of common stock upon exercise of stock options	663					663
Issuance of common stock upon exercise of stock options, Shares				222,147
Issuance of common stock upon vesting of restricted stock units				$ 2		(2)
Issuance of common stock upon vesting of restricted stock units, Shares				1,575,206
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(15,388)					(15,388)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options, Shares		(527,237)		(527,237)
Conversion of common stock				$ 3
Conversion of common stock, shares issued				3,077,327
Conversion of common stock, shares converted					(3,077,327)
Conversion of common stock, value					$ (3)
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	60,982
Redeemable noncontrolling interest, accretion to redemption value	109,398
Accretion to redeemable noncontrolling interest redemption value	(109,398)						(109,398)
Distribution to redeemable noncontrolling interest holders	(8,701)
Foreign currency translation adjustment	(2,283)							(2,283)
Ending balance at Dec. 31, 2021	516,841			$ 102	$ 16	$ 387,868	$ 129,258	$ (403)
Ending balance, Shares at Dec. 31, 2021		101,773,034	15,999,173	101,773,034	15,999,173
Redeemable Noncontrolling Interest, Ending Balance at Dec. 31, 2021	$ 162,808

Stock-based Compensation - Summary of Stock-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 77,710	$ 45,321	$ 34,301
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	2,471	17	155
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	52,916	$ 45,304	$ 34,146
CO Incentive Units and Subject Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 22,323

Segment and Geographic Information - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) Segment	Dec. 31, 2020 USD ($) Segment
Segment Reporting Information [Line Items]
Number of reportable segments \| Segment	2	2
Assets	$ 931,574	$ 502,298
Goodwill	158,287	29,129
International
Segment Reporting Information [Line Items]
Assets	35,521	32,012
Goodwill	$ 15,359	$ 16,652

- 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

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-Section 55
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03(a)(12))
-URI http://asc.fasb.org/extlink&oid=120400017&loc=d3e572229-122910

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-Section 50
-Paragraph 7
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124433192&loc=SL2890621-112765

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (bb)
-URI http://asc.fasb.org/extlink&oid=123419778&loc=d3e5710-111685

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 25
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=116870748&loc=SL6758485-165988

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

+ Details

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Consolidated net income	$ 110,373	$ 77,553	$ 42,146
Other comprehensive income:
Foreign currency translation adjustment	(2,283)	2,230	(421)
Consolidated comprehensive income	108,090	79,783	41,725
Comprehensive income attributable to redeemable noncontrolling interests	1,129
Comprehensive income attributable to CarGurus, Inc.	$ 106,961	$ 79,783	$ 41,725

- Definition

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

+ References + Details

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124509347&loc=SL7669619-108580

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22663-107794

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123482062&loc=SL123482106-238011

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=124431353&loc=SL124452729-227067

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=123570139&loc=d3e3000-108585

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=123454820&loc=SL4569616-111683

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 23: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124509347&loc=SL7669625-108580

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 29: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 31: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=120409616&loc=SL4591551-111686

Reference 32: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=120409616&loc=SL4591552-111686

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22658-107794

+ Details

Employee Benefit Plans - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Retirement Benefits [Abstract]
Employer matching contribution, percent of match	50.00%
Defined contribution plan, maximum annual contributions per employee, percent	6.00%
Annual maximum amount of employee contributions	$ 5,000,000
Defined contribution plan, employer contribution	$ 2,960,000	$ 2,675,000	$ 2,708,000

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Changes in Allowance for Doubtful Accounts

changes in the Company’s allowance for doubtful accounts are as follows:


	Balance at Beginning of Period		Provision		Write–offs, net of recoveries			Balance at End of Period
Year ended December 31, 2021	$	616	$	999	$	(1,195	)	$	420
Year ended December 31, 2020		240		1,930		(1,554	)		616

Schedule of Estimated Useful Lives of Property and Equipment

The estimated useful lives of the Company’s property and equipment are as follows:


		Estimated Useful Life (In Years)
Server and computer equipment		3
Capitalized internal-use software		3
Capitalized website development		3
Furniture and fixtures		5
Right-of-use assets		Lease term, or asset life if shorter
Leasehold improvements		Lease term, or asset life if shorter

Summary of Weighted Average Assumptions Utilized to Determine Fair Value of Options Granted

The weighted average assumptions utilized to determine the fair value of options granted during the year ended December 31, 2021 are as follows:


	Year Ended December 31,
	2021
Expected dividend yield		—
Expected volatility		50.95	%
Risk–free interest rate		0.69	%
Expected term (in years)		6.06

Fair Value of Financial Instruments Including Cash, Equivalents, and Investments - Schedule of Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Certificates of deposit due in one year or less, Amortized Cost	$ 90,000	$ 100,000
Held to maturity amortized cost	90,000	100,000
Certificates of deposit due in one year or less, Estimated Fair Value	90,000	100,000
Held to maturity fair value	$ 90,000	$ 100,000

Stock-based Compensation - Summary of Shares of Common Stock Reserved for Future Issuance (Details) - Class A Common Stock	Dec. 31, 2021 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares of authorized common stock reserved for future issuance	7,393,483
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares of authorized common stock reserved for future issuance	949,307
RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares of authorized common stock reserved for future issuance	3,834,322
2017 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total shares of authorized common stock reserved for future issuance	2,609,854

Subsequent Events - Additional Information (Details) - Segment	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Subsequent Event [Line Items]
Number of reportable segments		2	2
Forecast
Subsequent Event [Line Items]
Number of reportable segments	1

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

As of December 31, 2021 and 2020, property and equipment, net consist of the following:


	As of December 31,
	2021			2020
Server and computer equipment	$	8,349		$	8,108
Capitalized internal-use software		3,041			149
Capitalized website development		22,037			16,328
Furniture and fixtures		8,615			7,320
Leasehold improvements		24,082			20,507
Construction in progress		854			1,024
Finance lease right-of-use assets		556			41
		67,534			53,477
Less accumulated depreciation and amortization		(35,324	)		(25,994	)
Property and equipment, net	$	32,210		$	27,483

Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Server and Computer Equipment
Property Plant And Equipment [Line Items]
Estimated Useful Life	3 years
Capitalized Internal-Use Software
Property Plant And Equipment [Line Items]
Estimated Useful Life	3 years
Capitalized Website Development
Property Plant And Equipment [Line Items]
Estimated Useful Life	3 years
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Estimated Useful Life	5 years
Right-of-Use Assets
Property Plant And Equipment [Line Items]
Estimated Useful Life	Lease term, or asset life if shorter
Leasehold Improvements
Property Plant And Equipment [Line Items]
Estimated Useful Life	Lease term, or asset life if shorter

Stock-based Compensation - Summary of Restricted Stock Unit Activity (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Number of Shares
Unvested outstanding, beginning balance	3,483,816
Granted	2,969,187
Vested	(1,575,206)
Forfeited	(1,043,475)
Unvested outstanding, ending balance	3,834,322	3,483,816
Weighted-Average Grant Date Fair Value
Unvested outstanding, beginning balance	$ 32.52
Granted	33.83	$ 28.47	$ 39.07
Vested	33.28
Forfeited	33.23
Unvested outstanding, ending balance	$ 33.02	$ 32.52
Aggregate Intrinsic Value
Unvested outstanding, balance	$ 128,987	$ 110,538

Income Taxes - Schedule of Income Tax Effect of Each Type of Temporary Difference and Carryforward (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$ 1,429	$ 3,735
Credit carryforwards	4,241	17,572
Stock-based compensation	5,301	4,796
Lease liability	15,640	18,671
Investment in partnership	6,709
Accruals and reserves	5,942	3,249
Deferred tax assets	39,262	48,023
Valuation Allowance	(229)	(158)
Valuation Allowance, net	39,033	47,865
Deferred tax liabilities:
Prepaid expenses	(1,850)	(1,482)
Deferred commissions	(3,508)	(5,144)
Right of use assets	(12,955)	(15,920)
Intangible assets	(1,111)	(1,025)
Fixed assets	(6,289)	(4,811)
Deferred tax liability	(25,713)	(28,382)
Net deferred tax assets	$ 13,320	$ 19,483

Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent Events

Effective the first quarter of 2022, the Company revised its segment reporting from two reportable segments, United States and International, to one reportable segment. The change in segment reporting was made to align with changes made in the manner the CODM reviews the Company’s operating results in assessing performance and allocating resources. The CODM now assesses the Company's performance as a whole rather than by geographical location as a result of the international segment becoming less significant relative to the overall business due to growth in wholesale revenue. The change in segment reporting does not impact the Company’s consolidated financial statements.

Summary of Significant Accounting Policies - Additional Information (Details)		12 Months Ended
	Dec. 09, 2020 Installment shares	Dec. 31, 2021 USD ($) ReportingUnit d Customer $ / shares shares	Dec. 31, 2020 USD ($) Customer $ / shares shares	Dec. 31, 2019 USD ($) Customer shares	Jan. 14, 2021
Summary Of Significant Accounting Policies [Line Items]
Write-offs in capitalized website development costs			$ 1,151,000
Impairment of long-lived assets		$ 3,128,000	1,151,000	$ 0
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.
Amortization (accretion) of premiums or discounts		$ 0	0	0
Realized gains or losses on investments		0	0	0
Other than temporary impairments recognized in statements of operations		0	0
Restricted cash		16,336,000	10,627,000
Revenue recognized, accrued income expense and other liabilities		$ 9,137,000	9,984,000
Number of reporting units \| ReportingUnit		3
Impairment of goodwill		$ 0	0
Liabilities for uncertain tax positions		$ 0	0
Payment of revenue, performance obligation, description of payment terms		thirty to sixty days
Costs to obtain a contract		$ 14,912,000	19,996,000
Amortization of deferred contract costs		12,653,000	$ 11,605,000	$ 8,416,000
Guarantee income		5,537,000
Options granted during period \| shares			0	0
Tax demerits related to stock-based compensation		1,179,000
Provision for (benefit from) income taxes		38,987,000	$ 21,557,000	$ (3,441,000)
Advertising expense		151,457,000	$ 155,580,000	$ 287,107,000
Sublease income		$ 0
Stock Options
Summary Of Significant Accounting Policies [Line Items]
Options granted during period \| shares		619,618	0	0
Car Offer
Summary Of Significant Accounting Policies [Line Items]
Business acquisition, percentage of interest acquired		51.00%			51.00%
Number of days guarantee period \| d		45
Maximum potential amount of future payments required to make under guarantees		$ 76,075,000
Contingent loss liabilities		$ 0
Guarantees			$ 0
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
Class A Common Stock
Summary Of Significant Accounting Policies [Line Items]
Common stock, par value \| $ / shares		$ 0.001	$ 0.001
ASU 2019-12
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted		true
Change in accounting principle, accounting standards update, adoption date		Jan. 01, 2021
Change in accounting principle, accounting standards update, immaterial effect		true
Change in accounting principle, accounting standards update, transition option elected		ASU 2019-12
ASU 842
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted		true
Change in accounting principle, accounting standards update, adoption date		Jan. 01, 2019
Accounting Standards Update 2016-09 [Member]
Summary Of Significant Accounting Policies [Line Items]
Provision for (benefit from) income taxes				$ (11,115,000)
Trade Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Gross trade accounts receivable from receivables in transit from the third-party payment processor		$ 18,747,000	$ 0
Revenue recognized, accrued income expense and other liabilities		28,075,000
Receivables offset by payments received in advance		$ 46,822,000
Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Maturity of certificates of deposit, description		As of December 31, 2021 and 2020, investments consisted of U.S. certificates of deposit (“CDs”) with remaining maturities of less than twelve months.
Maturity period of certificates of deposit		12 months	12 months
Estimated useful lives		11 years
Maximum \| Car Offer
Summary Of Significant Accounting Policies [Line Items]
Business acquisition valuation period		1 year
Sales Revenue, Net \| Concentration of Credit Risk
Summary Of Significant Accounting Policies [Line Items]
Number of major customers \| Customer		0	0	0
Net Accounts Receivable \| Advertising Customers
Summary Of Significant Accounting Policies [Line Items]
Unbilled accounts receivable		$ 7,356,000	$ 7,426,000
Net Accounts Receivable \| Concentration of Credit Risk
Summary Of Significant Accounting Policies [Line Items]
Number of major customers \| Customer		2	1
Net Accounts Receivable \| Concentration of Credit Risk \| Customer One
Summary Of Significant Accounting Policies [Line Items]
Concentration of credit risk, percentage		47.00%	10.00%
Net Accounts Receivable \| Concentration of Credit Risk \| Customer Two
Summary Of Significant Accounting Policies [Line Items]
Concentration of credit risk, percentage		18.00%
United States
Summary Of Significant Accounting Policies [Line Items]
Write-offs in capitalized website development costs		$ 2,481,000
Impairment of intangible assets		647,000
Website Development Costs
Summary Of Significant Accounting Policies [Line Items]
Software and website development costs capitalized		8,190,000	$ 6,396,000
Amortization expense		$ 3,705,000	3,324,000	$ 1,643,000
Estimated useful life		3 years
Website Development Costs \| Exit of Certain International Markets
Summary Of Significant Accounting Policies [Line Items]
Write-offs in capitalized website development costs			844,000
Internal Use Software
Summary Of Significant Accounting Policies [Line Items]
Software and website development costs capitalized		$ 2,892,000	0
Amortization expense		$ 272,000	0	0
Estimated useful life		3 years
Hosting Arrangements
Summary Of Significant Accounting Policies [Line Items]
Software and website development costs capitalized		$ 3,842,000	332,000
Amortization expense		$ 1,761,000	$ 690,000	$ 132,000
2020 CO Plan
Summary Of Significant Accounting Policies [Line Items]
Requisite service period		3 years
Vesting description		with one third having vested on January 14, 2022 and one third vesting on each of January 14, 2023 and January 14, 2024, provided that a grantee’s continuous service to CarOffer has not terminated on the applicable vesting date.
Vesting Agreement \| Car Offer
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
Vesting description		with one third having vested on January 14, 2022 and one third vesting on each of January 14, 2023 and January 14, 2024, subject to the terms of the Vesting Agreement.
2021 CO Plan
Summary Of Significant Accounting Policies [Line Items]
Number of shares authorized for issuances \| shares		228,571
Requisite service period		3 years

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Domestic and Foreign Components of Income Before Income Taxes

The domestic and foreign components of income before income taxes are as follows:


	Year Ended December 31,
	2021		2020		2019
United States	$	148,037	$	97,120	$	37,476
Foreign		1,323		1,990		1,229
Income before income taxes	$	149,360	$	99,110	$	38,705

Schedule of Provision for (Benefit from) Income Taxes

The provision for (benefit from) income taxes contained the following components:


	Year Ended December 31,
	2021			2020			2019
Current provision (benefit):
Federal	$	22,133		$	(3,733	)	$	—
State		10,438			2,288			(220	)
Foreign		253			767			513
		32,824			(678	)		293
Deferred provision (benefit):
Federal		5,698			19,539			(2,377	)
State		669			2,734			(1,306	)
Foreign		(204	)		(38	)		(51	)
		6,163			22,235			(3,734	)
Income tax provision (benefit)	$	38,987		$	21,557		$	(3,441	)

Schedule of Effective Tax Rates

The Company's effective tax rate, calculated using income before income taxes adjusted for net income attributable to redeemable noncontrolling interest, is 26.3%, greater than the U.S. federal statutory rate primarily 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 in May 2021 upon the expiration of the transition period permitted following the IPO, partially offset by federal and state research and development tax credits. The Company’s effective tax rates for the year ending December 31, 2020 is greater than the U.S. federal statutory rate primarily due to state and local income taxes with partial offset by the benefits from the U.S. federal and state research and development credits and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company’s effective tax rates for the year ending December 31, 2019 is less than the U.S. federal statutory rate primarily due to federal and state research and development credits and excess tax deductions related to stock-based compensation awards.


	Year Ended December 31,
	2021			2020			2019
U.S. federal taxes at statutory rate		21.0	%		21.0	%		21.0	%
State taxes, net of federal benefit		7.5			6.2			0.2
Nondeductible expenses		0.3			0.4			2.9
Stock compensation		0.3			0.2			(22.0	)
Foreign rate differential		(0.2	)		(0.2	)		(0.3	)
Federal and state credits		(2.6	)		(3.2	)		(10.3	)
CARES Act		—			(2.4	)		—
Disallowed officer compensation		1.0			—			—
Investment in partnership		(0.3	)		—			—
Federal, state, and foreign provision to return differences		(0.7	)		—			—
Other		(0.2	)		(0.2	)		(0.2	)
Consolidated effective tax rate		26.1	%		21.8	%		(8.7	)%
Effective tax rate attributable to redeemable noncontrolling interest		0.2			—			—
Effective tax rate attributable to CarGurus, Inc.		26.3	%		21.8	%		(8.7	)%

As of December 31, 2021 and 2020, t

Schedule of Income Tax Effect of Each Type of Temporary Difference and Carryforward

he approximate income tax effect of each type of temporary difference and carryforward is as follows:


	As of December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	1,429		$	3,735
Credit carryforwards		4,241			17,572
Stock-based compensation		5,301			4,796
Lease liability		15,640			18,671
Investment in partnership		6,709			—
Accruals and reserves		5,942			3,249
		39,262			48,023
Valuation Allowance		(229	)		(158	)
		39,033			47,865
Deferred tax liabilities:
Prepaid expenses		(1,850	)		(1,482	)
Deferred commissions		(3,508	)		(5,144	)
Right of use assets		(12,955	)		(15,920	)
Intangible assets		(1,111	)		(1,025	)
Fixed assets		(6,289	)		(4,811	)
		(25,713	)		(28,382	)
Net deferred tax assets	$	13,320		$	19,483

Segment and Geographic Information - Summary of Operations by Segment and Geographical Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Segment revenue:
Revenue	$ 951,373	$ 551,451	$ 588,916
Segment income (loss) from operations:
Total income from operations	148,268	97,756	34,322
United States
Segment revenue:
Revenue	909,033	519,835	555,007
Segment income (loss) from operations:
Total income from operations	158,532	120,836	73,872
International
Segment revenue:
Revenue	42,340	31,616	33,909
Segment income (loss) from operations:
Total income from operations	$ (10,264)	$ (23,080)	$ (39,550)

- 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
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Organization and Business Description

12 Months Ended

Dec. 31, 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 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.

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 as independent brands the Autolist online marketplace, which it wholly owns, and the CarOffer, LLC (“CarOffer”) digital wholesale marketplace, in which it has a 51% interest. 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 as an independent brand the PistonHeads online marketplace, which it wholly owns. 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 and Note 15 of these consolidated financial statements for further segment reporting and geographical information.

The Company is subject to a number of risks and uncertainties common to companies in its and similar industries and stages of development including, but not limited to, rapid technological changes, competition from substitute products and services from larger companies, management of international activities, protection of proprietary rights, patent litigation, and dependence on key individuals.

Acquisitions - Unaudited Pro Forma Consolidated Financial Information (Details) - Car Offer - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Revenue	$ 339,342	$ 161,443	$ 954,312	$ 582,777
Consolidated net income	$ 34,158	$ 6,626	$ 110,055	$ 28,415

Consolidated Income Statements (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Depreciation, amortization and impairment expense	$ 26,061	$ 5,224	$ 3,263

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

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

For the years ended December 31, 2021, 2020, and 2019, a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share is as follows:


	Year Ended December 31,
	2021			2020		2019
Numerator:
Consolidated net income	$	110,373		$	77,553	$	42,146
Net income attributable to redeemable noncontrolling interest		1,129			—		—
Accretion of redeemable noncontrolling interest to redemption value		109,398			—		—
Net (loss) income attributable to common stockholders	$	(154	)	$	77,553	$	42,146
Denominator:
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic		117,142,062			112,854,524		111,450,443
Dilutive effect of share equivalents resulting from stock options		—			674,018		1,155,906
Dilutive effect of share equivalents resulting from unvested restricted stock units (service-based and market-based)		—			321,273		825,501
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — diluted		117,142,062			113,849,815		113,431,850
Net (loss) income per share attributable to common stockholders:
Basic	$	(0.00	)	$	0.69	$	0.38
Diluted	$	(0.00	)	$	0.68	$	0.37

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

For the years ended December 31, 2021, 2020, and 2019, potentially dilutive common stock equivalents that have been excluded from the calculation of diluted weighted‑average shares outstanding as their effect would have been anti‑dilutive are as follows:


	Year Ended December 31,
	2021		2020		2019
Stock options outstanding		617,504		—		—
Restricted stock units outstanding		2,867,330		2,722,226		1,144,287
CO Incentive Units, Subject Units and noncontrolling interest		1,509,750		—		—

Goodwill and Other Intangible Assets - Summary of Other Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 117,356	$ 13,504
Accumulated Amortization	32,794	2,642
Impairment	647
Net Carrying Amount	$ 83,915	$ 10,862
Brand
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	9 years 4 months 24 days	8 years 4 months 24 days
Gross Carrying Amount	$ 32,274	$ 9,405
Accumulated Amortization	4,206	1,235
Net Carrying Amount	$ 28,068	$ 8,170
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	2 years	1 year 7 months 6 days
Gross Carrying Amount	$ 19,870	$ 1,886
Accumulated Amortization	7,314	938
Net Carrying Amount	$ 12,556	$ 948
Developed Technology
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (years)	2 years	2 years 4 months 24 days
Gross Carrying Amount	$ 65,212	$ 2,213
Accumulated Amortization	21,274	469
Impairment	647
Net Carrying Amount	$ 43,291	$ 1,744

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2021

Business Combinations [Abstract]

Summary of Total Consideration Transferred

Total consideration transferred consists of the following:


	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 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 date of Closing. The following table presents the purchase price allocation recognized in the Company’s consolidated balance sheet as of the date of Closing:


	Adjusted Fair Value at Date of Acquisition
Cash and cash equivalents	$	5,237
Accounts receivable		16,119
Inventory		2,338
Prepaid expenses, prepaid income taxes and other current assets		95
Property and equipment, net		198
Intangible assets (1)		104,100
Goodwill (2)(4)		130,451
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)(4)		(60,982	)
Total purchase price	$	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, $28,991 of the goodwill is deductible under IRC Section 197. In connection with the transaction, the Company accelerated certain stock options deemed to be outside of consideration transferred. Therefore, for the year ended December 31, 2021, the Company recognized an additional $1,229 of stock-based compensation expense

(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.

(4)

The Company finalized its assessment of the significant inputs utilized in the Least Square Monte Carlo Simulation for the fair value of the redeemable noncontrolling interest and recognized an adjustment of $2,951 during the year ended December 31, 2021.

Unaudited Pro Forma Consolidated Financial Information

The following unaudited pro forma consolidated financial information combines the unaudited results of the Company for the years ended December 31, 2021 and 2020 and the unaudited results of CarOffer for the year ended December 31, 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 December 31, 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.


	Unaudited
	Three Months Ended December 31				Year Ended December 31
	2021		2020		2021		2020
Revenue	$	339,342	$	161,443	$	954,312	$	582,777
Consolidated net income (1)	$	34,158	$	6,626	$	110,055	$	28,415

(1)

For the three months ended December 31, 2021 pro forma consolidated net income includes $7,275 and $12,606 related to intangibles amortization and stock-based compensation for CarOffer, respectively. For the three months ended December 31, 2020 pro forma consolidated net income includes $7,275 and $12,606 related to intangibles amortization and stock-based compensation for CarOffer, respectively. For the year ended December 31, 2021, pro forma consolidated net income includes $29,100 and $22,419 related to intangibles amortization and stock-based compensation for CarOffer, respectively. For the year ended December 31, 2020, pro forma consolidated net income includes $29,100 and $22,234 related to intangibles amortization and stock-based compensation for CarOffer, respectively.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Employee Benefit Plans

14. Employee Benefit Plans

The Company maintains a defined contribution savings plan for all eligible U.S. employees under Section 401(k) of the Internal Revenue Code. Effective July 1, 2017, the Company implemented a matching policy, under which the Company matches 50% of an employee’s annual contributions to the 401(k) plan, up to a maximum of the lesser of (i) 6% of the employee’s base salary, bonus and commissions paid during the year or (ii) $5,000. Matching contributions are subject to vesting based on the employee’s start date and length of service. Employees can designate the investment of their 401(k) accounts into several mutual funds. The Company does not allow investment in its common stock through the 401(k) plan.

For the years ended December 31, 2021, 2020, and 2019, total employer contributions to the 401(k) plan were $2,960, $2,675, and $2,708, respectively.

Acquisitions - Summary of Total Consideration Transferred (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 14, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Cash paid, net of cash acquired		$ 64,273	$ 21,056	$ 19,139
Stock consideration		$ 103,645
Car Offer
Business Acquisition [Line Items]
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

Organization and Business Description - Additional Information (Details) - Segment	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Jan. 14, 2021
Business Acquisition [Line Items]
Number of reportable segments	2	2
Car Offer
Business Acquisition [Line Items]
Business acquisition, percentage of interest acquired	51.00%		51.00%

Stock-based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-based Compensation

10. Stock‑based Compensation

CarGurus Equity Incentive Plans

The Company’s Amended and Restated 2006 Equity Incentive Plan (the “2006 Plan”) provided for the issuance of non-qualified stock options, restricted stock and stock awards to the Company’s employees, officers, directors and consultants. The 2006 Plan authorized up to an aggregate of 3,444,668 shares of the Company's Class B common stock for such issuances. In conjunction with the effectiveness of the Company’s 2015 Equity Incentive Plan (the “2015 Plan”), the Board voted that no further stock options or other equity-based awards may be granted under the 2006 Plan.

In 2015, the Board first adopted the 2015 Plan, which became effective on June 26, 2015. The 2015 Plan provided for the issuance of stock-based incentives to employees, consultants and non-employee directors. As of the effective date of the 2015 Plan, up to 603,436 shares of common stock were authorized for issuance under the 2015 Plan. The 2015 Plan was amended and restated effective August 6, 2015 to permit the granting of restricted stock units (“RSUs”) under the 2015 Plan, to remove Class B common stock from the pool of shares available for issuance under the 2015 Plan and to make certain other desired changes. The 2015 Plan was further amended and restated at October 15, 2015 to add a ten-year term and to make certain other desired changes.

The 2015 Plan was further amended and restated effective August 22, 2016 to merge the 2006 Plan into the 2015 Plan, to increase the number of shares of Class A common stock that may be issued under the 2015 Plan, and to lengthen the term of the 2015 Plan to expire on August 21, 2026. In addition, pursuant to this amendment and restatement of the 2015 Plan, prior to giving effect to the recapitalization that occurred on June 21, 2017, there were (i) 618,691 shares of Class A common stock, plus (ii) 802,562 shares of Class B common stock authorized under the 2015 Plan; provided, however, that (1) the number of shares of Class A common stock was increased, on a share for share basis, by the number of shares of Class B common stock that were (a) subject to outstanding options granted under the 2006 Plan that expired, terminated, or were cancelled for any reason without having been exercised, (b) surrendered in payment of the exercise price of outstanding options granted under the 2006 Plan or (c) withheld in satisfaction of tax withholding upon exercise of outstanding options granted under the 2006 Plan, and the number of shares of Class B common stock reserved under the amended and restated 2015 Plan was decreased, on a corresponding share for share basis, (2) no new awards of Class B common stock could be granted under the amended and restated 2015 Plan, and (3) except with respect to outstanding options granted under the 2006 Plan that were exercised on or after the date of the amendment and restatement, no Class B common stock could be issued under the 2015 Plan.

In connection with the recapitalization that occurred on June 21, 2017, the 2015 Plan was further amended and restated to account for each outstanding common stock option being adjusted such that each share of common stock underlying such option became two shares of Class A common stock and four shares of Class B common stock underlying such option, and each outstanding RSU being adjusted such that each share of common stock issuable upon settlement of such RSU became two shares of Class A common stock and four shares of Class B common stock issuable upon settlement of such RSU. Pursuant to the 2015 Plan as further amended in connection with the recapitalization, there were (i) 3,181,740 shares of Class A common stock and (ii) 5,161,644 shares of Class B common stock authorized for issuance under the 2015 Plan.

In connection with the Company's initial public offering ("IPO"), in October 2017, the Board adopted, and the Company’s stockholders approved, the Omnibus Incentive Compensation Plan (the “2017 Plan”) for the purpose of granting incentive stock options, non-qualified stock options, stock awards, stock units, other share-based awards and cash awards to employees, advisors and consultants to the Company and its subsidiaries and non-employee members of the Board. The 2017 Plan is the successor to the 2015 Plan. The 2017 Plan authorizes the issuance or transfer of the sum of: (i) 7,800,000 shares of the Company’s Class A common stock, plus (ii) the number of shares of our Class A common stock (up to 4,500,000 shares) equal to the sum of (x) the number of shares of Class A common stock and Class B common stock of the Company subject to outstanding awards under the 2015 Plan as of October 10, 2017 that terminate, expire or are cancelled, forfeited, exchanged, or surrendered on or after October 10, 2017 without having been exercised, vested, or paid prior to October 10, 2017, including shares tendered or withheld to satisfy tax withholding obligations with respect to outstanding grants under the 2015 Plan, plus (y) the number of shares of Class A common stock reserved for issuance under the 2015 Plan that remain available for grant under the 2015 Plan as of October 10, 2017. The aggregate number of shares of Class A common stock that may be issued or transferred under the 2017 Plan pursuant to incentive stock options will not exceed 12,300,000 shares of Class A common stock. Unless determined otherwise by the Compensation Committee of the Board, as of the first trading day of January of each calendar year during the term of the 2017 Plan (excluding any extensions), eligible beginning with calendar year 2019, an additional number of shares of Class A common stock will be added to the number of shares of the Company’s Class A common stock authorized to be issued or transferred under the 2017 Plan and the number of shares authorized to be issued or transferred pursuant to incentive stock options, equal to 4% of the total number of shares of our Class A common stock outstanding on the last trading day in December of the immediately preceding calendar year, or 6,000,000 shares, whichever is less, or such lesser amount as determined by the Board (the “Evergreen Increase”). The Compensation Committee of the Board determined to not effectuate the Evergreen Increase that was otherwise scheduled to have occurred on each of January 2, 2019, January 2, 2020 and January 4, 2021. On January 3, 2022, an additional 4,070,921 shares of the Company's Class A Common Stock was authorized to be issued or transferred under the 2017 Plan pursuant to the Evergreen Increase. In conjunction with the adoption of the 2017 Plan, options and RSUs outstanding under the 2015 Plan will remain outstanding but no additional grants will be made from the 2015 Plan.

As of December 31, 2021, 2,609,854 shares of Class A common stock were available for issuance under the 2017 Plan.

CarOffer Equity Incentive Plans

The 2020 CO Plan provides for the issuance of CO Incentive Units to CarOffer’s employees, officers, managers, and consultants. The 2020 CO Plan authorized up to an aggregate of 485,714 CO Incentive Units for such issuances, all of which were issued prior to the close of the transaction.

At the time of close, 142,857 CO Incentive Units were accelerated and redeemed. The compensation relating to these CO Incentive Units was deemed to be outside of consideration transferred. Therefore, for the year ended December 31, 2021, the Company recognized an additional $1,229 of stock-based compensation expense. As of December 31, 2021, the remaining 342,857 CO Inventive Units were unvested. There was $18,640 of unrecognized stock‑based compensation expense related to unvested CO Incentive Units that is expected to be recognized over a weighted‑average period of 2.5 years. These CO Incentive Units are accounted for within other non-current liabilities in the consolidated balance sheets.

As of December 31, 2021, there were no CO Incentive Units available for issuance under the 2020 CO Plan.

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 these consolidated financial statements. As of December 31, 2021, there were 432,592 Subject Units issued and unvested. There was $29,507 of unrecognized stock‑based compensation expense related to unvested Subject Units that is expected to be recognized over a weighted‑average period of 2.0 years. These Subject Units are accounted for within other non-current liabilities in the consolidated balance sheets.

As of December 31, 2021, there were no Subject Units available for issuance under the Vesting Agreement.

The 2021 CO Plan provides for an incentive equity grant structure whereby 2021 Incentive Units will be granted to CIE and 2021 CO Plan grantees will receive an associated CIE Interest, with back-to-back vesting between the 2021 Incentive Units and the associated CIE Interest. The 2021 CO Plan authorized up to an aggregate of 228,571 2021 Incentive Units for such issuances.

As of December 31, 2021, 228,571 2021 Incentive Units were available for issuance under the 2021 CO Plan.

Stock Options

During the year ended December 31, 2021, stock option activity is as follows:


	Common Stock			Weighted- Average Exercise Price for Equity		Weighted- Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value(1)
Outstanding, December 31, 2020		590,397		$	1.99		4.0	$	17,560
Granted		619,618			35.75
Exercised		(222,147	)		2.98				6,027
Forfeited		(38,561	)		35.61
Outstanding, December 31, 2021		949,307			22.42		6.7	$	11,877
Options exercisable as of December 31, 2021		478,588			9.28		4.3	$	11,877

(1)

As of December 31, 2021 and 2020, the aggregate intrinsic value was calculated based on the positive difference, if any, between the estimated fair value of our common stock on December 31, 2021 and 2020, respectively, or the date of exercise, as appropriate, and the exercise price of the underlying options.

During the years ended December 31, 2020 and 2019, there were no options granted.

During the years ended December 31, 2020 and 2019, the aggregate intrinsic value for options exercised was $8,401 and $28,902, respectively.

As of December 31, 2021, there was $7,507 unrecognized stock‑based compensation expense related to unvested stock options that is expected to be recognized over a weighted‑average period of 3.2 years.

Restricted Stock Units

During the year ended December 31, 2021, RSU activity is as follows:


	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Unvested outstanding, December 31, 2020		3,483,816		$	32.52	$	110,538
Granted		2,969,187			33.83
Vested		(1,575,206	)		33.28
Forfeited		(1,043,475	)		33.23
Unvested outstanding, December 31, 2021		3,834,322			33.02	$	128,987

During the years ended December 31, 2020 and 2019, the weighted-average grant-date fair value of RSUs granted was $28.47 and $39.07 per share, respectively.

During the years ended December 31, 2020 and 2019, RSUs that vested and settled totaled 1,347,464 and 1,317,736, respectively.

During the years ended December 31, 2020 and 2019, the total fair value of RSUs vested was $40,613 and $31,533 respectively.

As of December 31, 2021, there was $106,888 of unrecognized stock‑based compensation expense related to unvested RSUs that is expected to be recognized over a weighted‑average period of 2.8 years.

Stock-based Compensation Expense

For the year ended December 31, 2021, 2020, and 2019, stock-based compensation expense by award type and where the stock compensation expense was recognized in the Company’s consolidated income statements is as follows:


	Year Ended December 31,
	2021		2020		2019
Options	$	2,471	$	17	$	155
Restricted Stock Units		52,916		45,304		34,146
CO Incentive Units and Subject Units		22,323		—		—
Total stock-based compensation expense	$	77,710	$	45,321	$	34,301


	Year Ended December 31,
	2021		2020		2019
Cost of revenue	$	417	$	293	$	354
Sales and marketing expense		12,801		10,564		9,989
Product, technology, and development expense		22,289		20,741		15,159
General and administrative expense		42,203		13,723		8,799
Total stock-based compensation expense	$	77,710	$	45,321	$	34,301

For the years ended December 31, 2021, 2020, and 2019, excluded from stock-based compensation expense is $3,247, $1,906, and $1,381 of capitalized website development costs and capitalized internal-use software costs, respectively.

For the years ended December 31, 2021, 2020, and 2019, the income tax benefit from stock-based compensation expense was $5,301, $4,796, and $2,953, respectively.

During the years ended December 31, 2021, 2020, and 2019, the Company withheld 527,237, 447,160, and 452,678 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, as applicable. The shares withheld return to the authorized, but unissued, pool under the 2017 Plan and can be reissued by the Company. For the years ended December 31, 2021, 2020, and 2019, total payments to satisfy employee tax withholding requirements and for option exercise costs due to net share settlements and cashless exercises of options, were $15,388, $11,184, and $16,470, respectively, and are reflected as a financing activity in the consolidated statements of cash flows.

Common Stock Reserved for Future Issuance

As of December 31, 2021, the Company had reserved the following shares of Class A common stock for future issuance:


Common stock options outstanding			949,307
Restricted stock units outstanding			3,834,322
Shares available for issuance under the 2017 Plan			2,609,854
Total shares of authorized common stock reserved for future issuance			7,393,483

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities and Other Non-Current Liabilities - Schedule of Other Non-current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
CO Incentive Unit and Subject Unit liability-classified awards	$ 21,095
Other non-current liabilities	2,544	$ 3,075
Total	$ 23,639	$ 3,075

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating Activities
Consolidated net income	$ 110,373	$ 77,553	$ 42,146
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	40,476	10,191	7,817
Currency (gain) loss on foreign denominated transactions	(70)	23	(690)
Deferred taxes	6,163	22,235	(3,734)
Provision for doubtful accounts	999	1,930	1,091
Stock-based compensation expense	53,525	45,090	34,301
Amortization of deferred contract costs	12,653	11,605	8,416
Impairment of long-lived assets	3,128	1,151	0
Changes in operating assets and liabilities:
Accounts receivable, net	(174,771)	3,889	(9,608)
Inventory	(17,318)
Prepaid expenses, prepaid income taxes, and other assets	(5,068)	3,484	(378)
Deferred contract costs	(7,714)	(11,378)	(15,979)
Accounts payable	35,397	(15,077)	4,268
Accrued expenses, accrued income taxes, and other liabilities	35,817	7,450	2,760
Deferred revenue	3,661	(861)	1,174
Lease obligations	1,041	(542)	(1,468)
Net cash provided by operating activities	98,292	156,743	70,116
Investing Activities
Purchases of property and equipment	(7,713)	(2,952)	(11,205)
Capitalization of website development costs	(6,163)	(4,579)	(3,021)
Cash paid for acquisitions, net of cash acquired	(64,273)	(21,056)	(19,139)
Investments in certificates of deposit	(120,000)	(100,000)	(177,808)
Maturities of certificates of deposit	130,000	111,692	188,916
Net cash used in investing activities	(68,149)	(16,895)	(22,257)
Financing Activities
Proceeds from exercise of stock options	663	1,136	1,807
Payment of finance lease obligations	(39)	(37)	(30)
Payment of withholding taxes and option costs on net share settlement of restricted stock units and stock options	(15,388)	(11,184)	(16,470)
Repayment of line of credit	(14,250)
Payments received in advance from third-party payment processor	46,822
Net cash provided by (used in) financing activities	17,808	(10,085)	(14,693)
Impact of foreign currency on cash, cash equivalents, and restricted cash	(597)	440	(1)
Net increase in cash, cash equivalents, and restricted cash	47,354	130,203	33,165
Cash, cash equivalents, and restricted cash at beginning of period	200,926	70,723	37,558
Cash, cash equivalents, and restricted cash at end of period	248,280	200,926	70,723
Supplemental cash disclosure of cash flow information:
Cash paid for income taxes	27,520	2,831	300
Cash paid for operating lease liabilities	16,168	14,941	10,906
Supplemental noncash disclosure of cash flow information:
Unpaid purchases of property and equipment, capitalized website development, capitalized internal-use software and hosting arrangements	478	136	647
Capitalized stock-based compensation expense in website development and capitalized internal-use software costs	3,247	$ 1,906	$ 1,381
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
Accretion of redeemable noncontrolling interest to redemption value	109,398
Distributions to redeemable noncontrolling interest holders	$ 8,701

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

The consolidated financial statements 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”).

While the Company disclosed total revenue in the consolidated income statements in the Company's Annual Report on Form 10-K for the years ended December 31, 2020 and 2019, filed with the SEC on February 12, 2021 and February 14, 2020, respectively, the accompanying consolidated income statements for the years ended December 2020 and 2019 present revenues disaggregated into marketplace, wholesale, and product revenues to conform to the current year presentation, as a result of the acquisition of a 51% interest in CarOffer.

While the Company disclosed other non-current liabilities separately in the consolidated statements of cash flows in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 14, 2020, the accompanying consolidated statements of cash flows for the year ended December 31, 2019 present other non-current liabilities with accrued expenses, accrued income taxes and other current liabilities to conform to the current year presentation, as other non-current liabilities did not meet the threshold for separate disclosure.

While the Company disclosed impairment of long-lived assets within depreciation and amortization in the consolidated statements of cash flows 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 accompanying consolidated statements of cash flows for the year ended December 31, 2020 present impairment of long-lived assets separately to conform to the current year presentation, as impairments of long-lived assets are material in the current year.

Principles of Consolidation

The accompanying 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, other than those disclosed in Note 15 of these consolidated financial statements.

Use of Estimates

The preparation of the 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 recognized in the period in which they become known.

Critical estimates relied upon in preparing the consolidated financial statements include the determination of sales allowance and variable consideration in the Company’s revenue recognition, allowance for doubtful accounts, the expensing and capitalization of product, technology, and development costs for website development and internal‑use software, the valuation and recoverability of goodwill, intangible assets and other long-lived assets, the valuation of redeemable noncontrolling interest, the recoverability of the Company’s net deferred tax assets and related valuation allowance and the valuation of equity and liability-classified compensation awards under ASC Topic 718, Stock-based Compensation ("ASC 718"). 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.

The majority of the Company's accounts receivable results from the acquisition of a 51% interest in CarOffer, which uses a third-party payment vendor for wholesale revenue transactions. An increase in wholesale revenue transactions as a result of the acquisition resulted in the increase in accounts receivable, net. The Company has had no material losses related to CarOffer receivables, as it does not release the title until successfully collecting funds from the buying dealer.

For the years ended December 31, 2021, 2020, and 2019, no individual customer accounted for more than 10% of total revenue.

As of December 31, 2021, two customers accounted for 47% and 18% of net accounts receivable, respectively. As of December 31, 2020, one customer accounted for approximately 10% of net accounts receivable.

As of December 31, 2021 and 2020, included in net accounts receivable was $7,356 and $7,426, respectively, of unbilled accounts receivable relating primarily to advertising customers invoiced in the subsequent period to services rendered.

Cash, Cash Equivalents, and Investments

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 less than one year 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.

The Company’s investment policy, which was approved by the Audit Committee of the Company’s board of directors (the “Board”), permits investments in fixed income securities, including U.S. government and agency securities, non‑U.S. government securities, money market instruments, commercial paper, certificates of deposit, corporate bonds, and asset‑backed securities.

As of December 31, 2021 and 2020, investments consisted of U.S. certificates of deposit (“CDs”) with remaining maturities of less than twelve months. The Company classifies CDs with readily determinable market values as held‑to‑maturity, because it is the Company’s intention to hold such investments until they mature. As such, as of December 31, 2021 and 2020, investments were recognized at amortized cost. The Company adjusts the cost of investments for amortization of premiums and accretion of discounts to maturity, if any. For the years ended December 31, 2021, 2020, and 2019, the Company did not have any premiums or discounts. Realized gains and losses from sales of the Company’s investments are included within other income, net in the consolidated income statements. For the years ended December 31, 2021, 2020 or 2019, there were no realized gains or losses on investments.

The Company reviews investments for other‑than‑temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. Other‑than‑temporary impairments of investments are recognized in the consolidated income statements if the Company has experienced a credit loss or if it is more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and duration of the impairment, and changes in value subsequent to the end of the period. As of December 31, 2021 and 2020, the Company determined that no other‑than‑temporary impairments were required to be recognized in the consolidated income statements.

Restricted Cash

As of December 31, 2021 and 2020, restricted cash was $16,336 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 and pass-through payments from customers related to the Company’s wholesale business. As of December 31, 2021 and 2020, portions of restricted cash were classified as short-term assets and long-term assets, as disclosed in the consolidated balance sheets.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded based on the amount due from the customer and a third-party payment processor. Accounts receivable do not bear interest.

The Company is exposed to credit losses primarily through its trade accounts receivable, which includes receivables in transit from a third-party payment processor. The third-party payment processor collects customer payments on the Company's behalf and remits them to the Company. Customer payments received, but not remitted as of period end are deemed to be receivables in transit. Additionally, the third-party payment processer provides payments in advance for certain customers to the Company. If the third-party payment processor does not receive customer payments related to the payments in advance, the balance is deducted from future remittances to the Company.

The Company offsets gross trade accounts receivable with payments received in advance from a third-party payment processer as it has the right of offset. As of December 31, 2021, gross trade accounts receivable from receivables in transit from the third-party payment processor was $18,747, offset by payments received in advance of $46,822, which resulted a net liability of $28,075 recognized within accrued expenses, accrued income taxes and other current liabilities in the consolidated balance sheets. Payments received in advance are deductible from future payments from the third-party payment processor if the third-party payment processor does not receive the payment from the customer. Payments received in advance are presented as cash flows from financing activities in the consolidated statements of cash flows. As of December 31, 2020, the Company did not have any gross trade accounts receivable from receivables in transit from the third-party payment processor.

The Company also is exposed to credit losses primarily through its trade accounts receivable. The Company offsets gross trade accounts receivable with an allowance for doubtful accounts. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable and is based upon historical loss trends, the number of days that billings are past due, an evaluation of the potential risk of loss associated with specific accounts, current conditions, and reasonable and supportable forecasts of economic conditions. The Company also considers current economic trends when evaluating the adequacy of the allowance for doubtful accounts. If circumstances relating to specific customers change, or unanticipated changes occur in the general business environment, particularly as it affects auto dealers, the Company’s estimates of the recoverability of receivables could be further adjusted.

Provisions for allowances for doubtful accounts are recognized within general and administrative expense in the consolidated income statements. Amounts are charged against the allowance after all means of collection have been exhausted, the potential for recovery is considered remote and when it is determined that expected credit losses may occur. The Company does not have any off‑balance sheet credit exposure related to its customers. Unbilled accounts receivable generally relate to services rendered in the current period, but not invoiced until the subsequent period.

As of December 31, 2021 and 2020, changes in the Company’s allowance for doubtful accounts are as follows:


	Balance at Beginning of Period		Provision		Write–offs, net of recoveries			Balance at End of Period
Year ended December 31, 2021	$	616	$	999	$	(1,195	)	$	420
Year ended December 31, 2020		240		1,930		(1,554	)		616

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization using the straight‑line method over the estimated useful lives of the assets. Leasehold improvements and right-of-use assets are amortized over the lease term, or the estimated useful life of the related asset, if shorter. The estimated useful lives of the Company’s property and equipment are as follows:


		Estimated Useful Life (In Years)
Server and computer equipment		3
Capitalized internal-use software		3
Capitalized website development		3
Furniture and fixtures		5
Right-of-use assets		Lease term, or asset life if shorter
Leasehold improvements		Lease term, or asset life if shorter

Expenditures for repairs and maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

Impairment of Long-Lived Assets

Impairment of Long‑Lived Assets

The Company evaluates the recoverability of long‑lived assets, such as property and equipment and intangible assets, for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. During this review, the Company re‑evaluates the significant assumptions used in determining the original cost and estimated lives of long‑lived assets. Although the assumptions may vary from asset to asset, they generally include operating results, changes in the use of the asset, cash flows, and other indicators of value. Management then determines whether the remaining useful life continues to be appropriate, or whether there has been an impairment of long‑lived assets based primarily upon whether expected future undiscounted cash flows are sufficient to support the assets’ recovery. Recoverability of these assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

For the year ended December 31, 2021, the Company wrote off $2,481 of U.S. capitalized website development costs within operating expense in the consolidated income statements and $647 of U.S. intangible assets within cost of revenue in the consolidated income statements related to certain developed technology in which the Company has decided to cease investment. For the year ended December 31, 2020, the Company wrote off $1,151 of capitalized website development costs, of which $844 related to the exit of certain international markets in connection with the cost-savings initiative by the Company during the second quarter of 2020 (the "Expense Reduction Plan"). For the year ended December 31, 2019, the Company did not identify any impairment of long‑lived assets.

Capitalized Website Development and Capitalized Internal-Use Software Costs

The Company capitalizes certain costs associated with the development of its websites and internal‑use software after the preliminary project stage is complete and until the website development or software is ready for its intended use. Research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance, and general and administrative or overhead costs are expensed as incurred. Capitalization begins when the preliminary project stage is complete, management authorizes and commits to the funding of the project with the required authority, it is probable the project will be completed, the website development or software will be used to perform the functions intended and certain functional and quality standards have been met. Qualified costs incurred during the operating stage of our website development or software relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality, while costs that cannot be separated between maintenance of, and minor upgrades and enhancements to, websites and internal‑use software are expensed as incurred. Capitalized website development and capitalized internal-use software costs are recognized within property and equipment, net in the consolidated balance sheets.

Capitalized website development and capitalized internal-use software costs are amortized on a straight‑line basis over their estimated useful life of three years beginning with the time when the product is ready for intended use. Capitalized website development costs related amortization expenses are recognized within cost of revenue in the consolidated income statements. Capitalized internal-use software costs related amortization expenses are recognized within depreciation and amortization in the consolidated income statements. 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.

During the year ended December 31, 2021 and 2020, capitalized website development costs were $8,190 and $6,396, respectively. During the year ended December 31, 2021, capitalized internal-use software costs were $2,892. During the year ended December 31, 2020, no capitalized internal-use software costs were recognized.

For the year ended December 31, 2021, 2020, and 2019, amortization expense associated with its capitalized website development costs were $3,705, $3,324 and $1,643, respectively. For the year ended December 31, 2021, amortization expense associated with capitalized internal-use software costs was $272. For the years ended December 31, 2020 and 2019, no amortization expense associated with its capitalized internal-use software costs was recognized.

Capitalized Hosting Arrangements

Hosting arrangement capitalized implementation costs are amortized on a straight‑line basis over an estimated useful life of the term of the hosting arrangement, taking into consideration several other factors such as, but not limited to, options to extend the hosting arrangement or options to terminate the hosting arrangement, beginning with the time when the software is ready for intended use.

Hosting arrangements costs are recognized within the same line item in the consolidated income statements as the expense for fees for the associated hosting arrangement. Management 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.

During the years ended December 31, 2021, 2020, and 2019, the Company launched separate initiatives designed to enhance its hosting arrangements related to its enterprise applications, each of which are ongoing. During the years ended December 31, 2021 and 2020, implementation costs were $3,842 and $332, respectively, and recognized within other non-current assets and within prepaid expenses, prepaid income taxes and other current assets, respectively, in the consolidated balance sheets.

For the years ended December 31, 2021, 2020, and 2019, amortization expense associated with its hosting arrangements was $1,761, $690, and $132, respectively, and recognized within operating expense in the consolidated income statements.

Business Combinations

Valuation of Acquired Assets and Liabilities

The Company measures all consideration transferred in a business combination at its acquisition-date fair value. Consideration transferred is determined by the acquisition-date fair value of assets transferred, liabilities assumed, including contingent consideration obligations, as applicable. The Company measures goodwill as the excess of the consideration transferred over the net of the acquisition-date amounts of assets acquired less liabilities assumed.

The Company makes significant assumptions and estimates in determining the fair value of the acquired assets and liabilities as of the acquisition date, especially the valuation of intangible assets and certain tax positions. The Company records estimates as of the acquisition date and reassess the estimates at each reporting period up to one year after the acquisition date. Changes in estimates made prior to finalization of purchase accounting are recognized within goodwill.

Intangible Assets

Intangible assets are recognized at their estimated fair value at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives on a straight-line basis. Amortization is recognized over the relevant estimated useful lives ranging from three to eleven years.

The Company evaluates the useful lives of these assets on an annual basis. If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. The Company monitors its long-lived assets for impairment indicators on an ongoing basis in accordance with GAAP, and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If impairment indicators exist, the Company performs the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values.

Goodwill

Goodwill is recognized when consideration paid in a purchase acquisition exceeds the fair value of the net assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. Conditions that could trigger a more frequent impairment assessment include, but are not limited to, a significant adverse change in certain agreements, significant underperformance relative to historical or projected future operating results, an economic downturn affecting automotive marketplaces, increased competition, a significant reduction in our stock price for a sustained period or a reduction of our market capitalization relative to net book value.

As of and for the year ended December 31, 2021, the Company has determined that it had three reporting units, United States, International, and CarOffer. The Company elected to bypass the optional qualitative test for impairment and proceed to Step 1, which is a quantitative impairment test. The Company evaluates impairment annually on October 1 by comparing the estimated fair value of each reporting unit to its carrying value. The Company estimates fair value using a market approach, based on market multiples derived from public companies that are identified as peers. In 2021, the Company calculated the fair value of its reporting units using the market approach, which required the Company to estimate the forecasted revenue and estimate revenue market multiples using publicly available information for each of their reporting units. Developing these assumptions required the use of significant judgment and estimates. Actual results may differ from these forecasts.

For the years ended December 31, 2021 and 2020, the Company did not identify any impairment of its goodwill.

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 these consolidated financial statements), which, among other matters, sets forth certain put and call rights described in Note 4 of these consolidated financial statements. 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 within the mezzanine section in the consolidated balance sheet, which is presented above the equity section and below the liabilities section. As of the date of Closing (as defined in Note 4 of these consolidated financial statements), 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 income (loss) attributable to the noncontrolling interest. Adjustments to the carrying value of the redeemable noncontrolling interest resulting from changes in the redemption value are recognized within retained earnings in the consolidated balance sheets.

Leases

In February 2016, the FASB issued ASC Topic 842, Leases (“ASC 842”), which requires a lessee to recognize most leases in the consolidated balance sheet but recognize expenses in the consolidated income statement in a manner similar to pre-existing practice, on a straight-line basis. The update states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying assets for the lease term. The Company adopted ASC 842 as of January 1, 2019.

The Company reviews all material contracts for embedded leases to determine if they have a right-of-use asset. The Company made an accounting policy election to not separate lease components from non-lease components for all leases.

The Company recognizes rent expense on a straight-line basis over the lease period. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company allocates lease costs across all departments based on headcount in the respective location.

Variable lease payments that depend on an index or a rate are included in the lease payments and are measured using the prevailing index or rate at the measurement date. Variable lease payments not based on an index or a rate are excluded from lease payments and are expensed as incurred.

The Company made an accounting policy election to not recognize a lease liability or right-of-use asset on its consolidated balance sheet for leases with an initial term of twelve months or less, and instead to recognize lease payments in the consolidated income statement on a straight-line basis over the lease term and variable lease payments that do not depend on an index or rate as expense in the period in which the achievement of the specified target that triggers the variable lease payments becomes probable.

The Company recognizes sublease income on a straight-line basis over the sublease period. The Company recognizes sublease income net as rent expense within operating expenses in the consolidated income statements as subleasing is not a primary business activity of the Company and is meant to offset occupancy costs. For the year ended December 31, 2021, the Company did not recognize any sublease income. For the years ended December 31, 2020 and 2019, the Company recognized sublease income within other income in the consolidated income statements for an immaterial amount.

Contingent Liabilities

The Company has certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues for loss contingencies when losses become probable and can be reasonably estimated. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recognized as a liability. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable; however, it discloses the range of such reasonably possible losses.

Income Taxes

The Company accounts for income taxes in accordance with the liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions recognized in the consolidated financial statements by prescribing a more‑likely‑than‑not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Interest and penalties, if applicable, related to uncertain tax positions would be recognized as a component of income tax expense. As of December 31, 2021 and 2020, the Company has no recognized liabilities for uncertain tax positions.

The Tax Cuts and Jobs Act subjects a U.S. shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. An entity can make an accounting policy election, per the FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income (“ASC 740”), either to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI as a period cost in the year the tax is incurred.

Fair Value of Financial Instruments

The Company measures eligible assets and liabilities at fair value with changes in value recognized in earnings. As of December 31, 2021 and 2020, there were no liabilities that were measured at fair value. 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. During the years ended December 31, 2021 and 2020, 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.

ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a three‑level valuation hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market‑based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1 — Quoted unadjusted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model‑derived valuations in which all observable inputs and significant value drivers are observable in active markets.

Level 3 — Model‑derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company.

The Company has evaluated the estimated fair value of financial instruments using available market information. The use of different market assumptions, estimation methodologies, or both, could have a significant effect on the estimated fair value amounts.

As of December 31, 2021 and 2020, the carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, investments, accounts receivable, accounts payable, and accrued expenses approximated their fair values due to the short‑term nature of these instruments.

Foreign Currency Translation

The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s foreign subsidiaries is the local currency of each subsidiary. All assets and liabilities in the balance sheets of entities whose functional currency is a currency other than the U.S. dollar are translated into U.S. dollar equivalents at exchange rates as follows: (i) asset and liability accounts at period‑end rates; (ii) income statement accounts at weighted‑average exchange rates for the period; and (iii) stockholders’ equity accounts at historical exchange rates. The resulting translation adjustments are excluded from consolidated net income and are recognized within accumulated other comprehensive (loss) income in our consolidated balance sheets.

Foreign currency transaction gains and losses are included in consolidated net income for the period. The Company's foreign subsidiaries have intercompany transactions that are eliminated upon consolidation, and these transactions expose the Company to foreign currency exchange rate fluctuations. Exchange rate fluctuations on short‑term intercompany transactions are recognized in other income, net in our consolidated income statements. Exchange rate fluctuations on long-term intercompany transactions are recognized within accumulated other comprehensive (loss) income in our consolidated balance sheets.

Revenue Recognition

Sources of Revenue

The Company derives its revenue from three sources: (i) marketplace revenue, which consists primarily of dealer subscriptions to the Company's Listings packages and Real-time Performance Marketing ("RPM") digital advertising suite, advertising revenue from auto manufacturers and other auto‑related brand advertisers, and revenue from partnerships with financing services companies; (ii) wholesale revenue, which consists primarily of transaction fees earned by CarOffer from facilitating the purchase and sale of vehicles between dealers; and (iii) product revenue, which consists primarily of aggregate proceeds received on the sale of vehicles.

Revenue Recognition

ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps:

1) Identify the contract with a customer

2) Identify the performance obligations in the contract

3) Determine the transaction price

4) Allocate the transaction price to performance obligations in the contract

5) Recognize revenue when or as the Company satisfies a performance obligation

Marketplace Revenue - Description

The Company offers multiple types of marketplace Listings packages to its dealers for its CarGurus U.S. platform (availability varies on the Company's other marketplaces): Restricted Listings, which is free; and various levels of Listings packages, which each require a paid subscription under a monthly, quarterly, semiannual, or annual subscription basis.

The Company’s subscriptions for customers generally auto-renew on a monthly basis and are cancellable by dealers with 30 days’ advance notice prior to the commencement of the applicable renewal term, although during the second quarter of 2020 the Company did not require 30 days’ advance notice of termination from dealers who cancelled as a result of the COVID-19 pandemic. Subscription pricing is determined based on a dealer’s inventory size, region, and the Company's assessment of the connections and return on investment ("ROI") the platform will provide them and is subject to discounts and/or fee reductions that the Company may offer from time to time. The Company also offers all dealers on the platform access to its Dealer Dashboard, which includes a performance summary, Dealer Insights tool, and user review management platform. Only dealers subscribing to a paid Listings package have access to the Pricing Tool, Market Analysis tool and IMV Scan tool.

Dealer customers do not have the right to take possession of the Company’s software.

In addition to displaying inventory in the Company's marketplace and providing access to the Dealer Dashboard, the Company offers dealers subscribing to certain of its Listings packages other subscription advertising and customer acquisition products and enhancements marketed under the Company's RPM digital advertising suite. Through RPM, dealers can buy advertising that appears in the Company's marketplace, on other sites on the internet, and/or on high-converting social media platforms. Such advertisements can be targeted by the user’s geography, search history, CarGurus website activity and a number of other targeting factors, allowing dealers to increase their visibility with in-market consumers and drive qualified traffic for dealers.

Payment is typically due on the first day of each calendar month and is recognized as accounts receivable or short-term deferred revenue when payment is received in advance of services being delivered to the customers.

The Company also offers paid Listings packages for the Autolist website and paid Listings and advertising products for the PistonHeads website.

Marketplace revenue also consists of non-dealer advertising revenue from auto manufacturers and other auto-related brand advertisers sold on a cost per thousand impressions ("CPM") basis. An impression is an advertisement loaded on a web page. In addition to advertising sold on a CPM basis, the Company also has advertising sold on a cost per click basis. Auto manufacturers and other brand advertisers can execute advertising campaigns that are targeted across a wide variety of parameters, including demographic groups, behavioral characteristics, specific auto brands, categories such as Certified Pre-Owned, and segments such as hybrid vehicles. The Company does not provide minimum impression guarantees or other types of minimum guarantees in its contracts with customers. Pricing is primarily based on advertisement size and position on the Company’s websites and mobile applications, and fees are billed monthly in arrears. Unbilled accounts receivable generally relate to services rendered in the current period, but not invoiced until the subsequent period.

The Company sells advertising directly to auto manufacturers and other auto related brand advertisers, as well as indirectly through revenue sharing arrangements with advertising exchange partners. Company-sold advertising is not subject to revenue sharing arrangements. Company-sold advertising revenue is recognized based on the gross amount charged to the advertiser. Partner-sold advertising revenue is recognized based on the net amount of revenue received from the content partners.

Revenue from advertising sold directly by the Company is recognized on a gross basis because the Company is the principal in the arrangement, controls the ad placement and timing of the campaign, and establishes the selling price. The Company enters into contractual arrangements directly with advertisers and is directly responsible for the fulfillment of the contractual terms including any remedy for issues with such fulfillment.

Advertising revenue subject to revenue sharing agreements between the Company and advertising exchange partners is recognized based on the net amount of revenue received from the partner. The advertising partner is responsible for fulfillment, including the acceptability of the services delivered. In partner-sold advertising arrangements, the advertising partner has a direct contractual relationship with the advertiser. There is no contractual relationship between the Company and the advertiser for partner-sold transactions. When an advertising exchange partner sells advertisements, the partner is responsible for fulfilling the advertisements, and accordingly, the Company has determined the advertising partner is the principal in the arrangement. Additionally, for auction-based partner agreements, the Company has latitude in establishing the floor price, but the final price established by the exchange server is at market rates.

Customers are billed monthly in arrears and payment terms are generally thirty to sixty days from the date invoiced.

Marketplace revenue also includes revenue from partnerships with certain financing services companies pursuant to which the Company enables eligible consumers on the Company's CarGurus U.S. website to pre-qualify for financing on cars from dealerships that offer financing through such companies. The Company primarily generates revenue from these partnerships based on the number of funded loans from consumers who pre-qualify with its lending partners through its site.

The Company also offers non-dealer advertising products for the Autolist and PistonHeads websites.

Marketplace Revenue - Revenue Recognition

For dealer listings, the Company provides a single similar service each day for a period of time. Each time increment (i.e., one day), rather than the underlying activities, is distinct and substantially the same and therefore the performance obligation of the Company is to provide a series of daily activities over the contract term. Similar to the dealer listings, the dealer advertising is considered a promise to provide a single similar service each day. Each time increment is distinct and substantially the same and therefore the performance obligation of the Company is to provide a series of daily activities over the contract term.

Total consideration for marketplace revenue is stated within the contracts. There are no contractual cash refund rights, but credits may be issued to a customer at the sole discretion of the Company. At the portfolio level, there is also variable consideration that needs to be included in the transaction price. Variable consideration consists of sales allowances, usage fees, and concessions that change the transaction price of the unsatisfied or partially unsatisfied performance obligation. The Company recognizes that there are times when there is a customer satisfaction issue or other circumstance that will lead to a credit. Due to the known possibility of future credits, a monthly sales allowance review is performed to defer revenue at a portfolio level for such future adjustments in the period of incurrence. The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its customers. In assessing the adequacy of the sales allowance, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments, credits and losses may vary from actual results which could lead to material adjustments to the financial statements. Sales allowances are recognized as a reduction to revenue in the consolidated income statements.

Performance obligations are satisfied over time as the customer simultaneously receives and consumes the benefit of the service. Revenue is recognized ratably over the subscription period beginning on the date the Company starts providing services to the customer under the contract. Revenue is presented net of any taxes collected from customers.

For advertising revenue, the performance obligation is to publish the agreed upon campaign on the Company’s websites and load the related impressions.

Advertising contracts state the transaction price within the agreement with payment generally being based on the number of clicks or impressions delivered on the Company’s websites. Total consideration is based on output and deemed variable consideration constrained by an agreed upon delivery schedule. Additionally, there are generally no contractual cash refund rights. Certain contracts do contain the right for credits in situations in which impressions are not displayed in compliance with contractual specifications. At an individual contract level, the Company may give a credit for a customer satisfaction issue or other circumstance. Due to the known possibility of future credits, a monthly review is performed to defer revenue at an individual contract level for such future adjustments in the period of incurrence.

As consideration is driven by the number of impressions delivered on the CarGurus websites, the consideration for each period is allocated to the period in which the service was rendered.

Performance obligations for company-sold advertising revenue and partner-sold advertising revenue are satisfied over time as impressions are delivered. Revenue is recognized based on the total number of impressions delivered within the specified period. Revenue from advertising sold directly by the Company is recognized based on the gross amount charged to the advertiser and advertising revenue sold by partners is recognized based on the net amount of revenue received from the content partners. Revenue is presented net of any taxes collected from customers.

Marketplace revenue includes revenue from contracts for which the performance obligation is a series of distinct services with the same level of effort daily. For these contracts, the Company estimates the value of the variable consideration in determining the transaction price and allocates it to the performance obligation. Revenue is estimated and recognized on a ratable basis over the contractual term. The Company reassesses the estimate of variable consideration at each reporting period.

Wholesale Revenue - Description

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 – in these instances, CarOffer collects a transaction fee from the buyer.

Wholesale revenue also includes fees earned by CarOffer from performing inspection and transportation services, where CarOffer collects fees from the buyer. Inspection and transportation service revenue is inclusive of dealer to dealer transactions, other marketplace to dealer transactions, and customer to dealer transactions.

Wholesale revenue also includes fees earned by CarOffer from certain guarantees offered to dealers, where CarOffer collects fees from the buying dealer or selling dealer, as applicable. Guarantee revenue is not accounted for under ASC 606 and is accounted for under ASC 460 as discussed further in Note 2 of these consolidated financial statements.

Wholesale Revenue - Revenue Recognition

When facilitating the purchase and sale of vehicles between dealers and for vehicles sold to dealers that are acquired at other marketplaces, CarOffer does not control the vehicle and therefore acts as an agent in the transaction. Revenue earned from the fees for facilitating these transactions is recognized at a point in time when the vehicle is sold on a net basis.

For inspection and transportation services, CarOffer leverages a network of third-party inspection service providers and transportation carriers. CarOffer controls both inspection and transportation services as it is primarily responsible for fulfillment and therefore acts as a principal in the transaction. 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. Revenue from both inspection and transportation services is recognized on a gross basis. Unearned revenue related to unsatisfied performance obligations is recognized as deferred revenue.

Wholesale revenue also includes arbitration in which, in the majority of instances, the vehicle is rematched to a new buyer and not acquired by CarOffer. Arbitration is the process by which CarOffer investigates and resolves claims from buying dealers. In these situations, CarOffer does not control the vehicle and therefore acts as an agent in the transaction.

Within wholesale transactions, there are no contractual cash refund rights, but credits may be issued to a customer at the sole discretion of the Company. At the portfolio level, there is also variable consideration that needs to be included in the transaction price. Variable consideration consists of sales allowances and concessions that change the transaction price of the unsatisfied or partially unsatisfied performance obligation. The Company recognizes that there are times when there is a customer satisfaction issue or other circumstance that will lead to a credit or arbitration. Due to the known possibility of future credits, a monthly sales allowance review is performed to defer revenue at a portfolio level for such future adjustments in the period of incurrence. The Company establishes sales allowances at the time of revenue recognition based on its history of adjustments and credits provided to its customers. In assessing the adequacy of the sales allowance, the Company evaluates its history of adjustments and credits made through the date of the issuance of the financial statements. Estimated sales adjustments, credits and losses may vary from actual results which could lead to material adjustments to the financial statements. Sales allowances are recognized as a reduction to revenue in the consolidated income statements.

Wholesale revenue is presented net of any taxes collected from customers.

Product Revenue - Description

Product revenue includes the aggregate proceeds received on the sale of vehicles. This revenue relates to vehicles sold to dealers that CarOffer acquires directly from customers, inclusive of transaction fees collected from the buyer, and in limited situations across all CarOffer transactions, vehicles CarOffer resells after acquiring a vehicle via arbitration.

Product - Revenue Recognition

For vehicles sold to dealers that are acquired directly from consumers, CarOffer controls the vehicle and therefore acts as a principal in the transaction. Revenue earned from the fees for facilitating these transactions is recognized at a point in time when the vehicle is sold on a gross basis.

In limited situations across all CarOffer transactions, during an arbitration process, CarOffer acquires vehicles in transactions in which it controls the vehicle and therefore acts as a principal in the transaction. Revenue earned from the sale of the vehicle in these transactions is recognized at a point in time on a gross basis.

Contracts with Multiple Performance Obligations

The Company periodically enters into arrangements that include Listings and/or dealer advertising product subscriptions within marketplace revenue. These contracts include multiple promises that the Company evaluates to determine if the promises are separate performance obligations. Performance obligations are identified based on services to be transferred to a customer that are distinct within the context of the contractual terms. Once the performance obligations have been identified, the Company determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. If required, the transaction price is allocated to each performance obligation in the contract based on a relative standalone selling price method as the performance obligation is being satisfied. For the Company’s arrangements that include Listings and/or dealer advertising product subscriptions, the performance obligations were satisfied over a consistent period of time and therefore the allocations did not impact the revenue recognized.

For CarOffer's arrangements that include multiple performance obligations, the Company allocates revenue based on fair value. Vehicle and inspection revenues are recognized at a point in time and transportation revenue is recognized over time.

Costs to Obtain a Contract

Commissions paid to sales representatives and payroll taxes are considered costs to obtain a contract. Under ASC 606, the costs to obtain a contract require capitalization and amortization of those costs over the period of benefit. Although the guidance specifies the accounting for an individual contract with a customer, as a practical expedient, the Company has opted to apply the guidance to a portfolio of contracts with similar characteristics. The Company has opted to apply another practical expedient to immediately expense the incremental cost of obtaining a contract when the underlying related asset would have been amortized over one year or less. As such, the Company applied this practical expedient to advertising contracts as the term is one year or less and these contracts do not renew automatically. The practical expedient is not applicable to marketplace subscription contracts as the period of benefit including renewals is anticipated to be greater than one year. The assets are periodically assessed for impairment.

For marketplace subscription customers, the commissions paid on contracts with new customers, in addition to any commission amount related to incremental sales, are capitalized and amortized over the estimated benefit period of the customer relationship taking into account factors such as peer estimates of technology lives and customer lives as well as the Company's own historical data. Commissions paid that are not directly related to obtaining a new contract are expensed as incurred.

Additionally, the Company allocates employer payroll tax expense to the commission expense in proportion to the overall payroll taxes paid during the respective period. As such, capitalized payroll taxes are amortized in the same manner as the underlying capitalized commissions.

As of December 31, 2021 and 2020, assets associated with costs to obtain a contract were $14,912 and $19,996, respectively. This decrease in assets recognized for costs to obtain a contract was due to amortization from prior periods’ assets being greater than the capitalizable costs to obtain a contract in current period. For the years ended December 31, 2021, 2020, and 2019, amortization expense associated with costs to obtain a contract was $12,653, $11,605, and $8,416, respectively.

Deferred Revenue

Deferred revenue primarily consists of payments received in advance of revenue recognition from the Company’s marketplace revenue and is recognized as the revenue recognition criteria are met. The Company generally invoices its customers monthly. Accordingly, the deferred revenue balances do not represent the total contract value of annual or multiyear subscription agreements. Deferred revenue that is expected to be recognized during the succeeding 12‑month period is recognized as current deferred revenue and the remaining portion is recognized as noncurrent in the consolidated balance sheets. All deferred revenue was recognized as current for all periods presented.

Marketplace Cost of Revenue

Marketplace cost of revenue includes expenses related to supporting and hosting digital product offerings. These expenses include personnel and related expenses for our customer support team, including salaries, benefits, incentive compensation, and stock-based compensation, third-party service provider expenses such as advertising, data center and networking expenses, depreciation expense associated with our property and equipment, amortization of developed technology, amortization of capitalized website development and allocated overhead expenses. The Company allocates overhead expenses, such as rent and facility expenses, information technology expense, and employee benefit expense, to all departments based on headcount. As such, general overhead expenses are reflected in cost of revenue and each operating expense category.

Wholesale Cost of Revenue

Wholesale cost of revenue includes expenses related to supporting the facilitation of the purchase and sale of vehicles between dealers, the sale by CarOffer to dealers of vehicles that it acquires at other marketplaces, and net losses on vehicles related to guarantees offered to dealers. These expenses include vehicle transportation and inspection expenses, personnel and related expenses for employees directly involved in the fulfillment and support of transactions, including salaries, benefits, incentive compensation and stock-based compensation, third-party service provider expenses, amortization of developed technology, amortization of capitalized website development and allocated overhead expenses.

Product Cost of Revenue

Product cost of revenue includes expenses related to vehicles sold to dealers that CarOffer acquires directly from consumers and in limited situations across all CarOffer transactions, in which CarOffer acquires the vehicle via arbitration. These expenses include expenses for vehicles in which CarOffer controls the vehicle and therefore acts as a principal in the transaction.

Guarantees

CarOffer provides certain guarantees to dealers through its 45-Day Guaranteed Bid and OfferGuard product offerings, which are accounted for under ASC Topic 460, Guarantees ("ASC 460").

45-Day Guaranteed Bid is an arrangement through which a selling dealer lists a car on the CarOffer platform, and CarOffer provides an offer to purchase the vehicle listed at a specified price at any time over a 45-day period. This provides the seller with a put option, where they have the right, but not the obligation, to require CarOffer to purchase the vehicle during this window. OfferGuard is an arrangement through which a buying dealer purchases a car on the CarOffer platform, and CarOffer provides an offer to purchase the vehicle at a specified price between days 1 and 3, and days 42 and 45 if the dealer is not able to sell the vehicle after 42 days.

A guarantee liability is initially measured using the amount of consideration received from the dealer for the purchase of the guarantee. The initial liability is released, and guarantee income is recognized, upon the earliest of the following: the vehicle sells during the guarantee period, the seller exercises it’s put option during the guarantee period, or the option expires unexercised at the end of the guarantee period. Guarantee income is recognized within wholesale revenue in the consolidated income statements. When it is probable and reasonably estimable that CarOffer will incur a loss on a vehicle that it is required to purchase, a liability, and a corresponding charge to cost of sales will be recognized for the amount of the loss in the consolidated balance sheets. Gains and losses resulting from the dealers exercise of guarantees are recognized within cost of sales in the consolidated balance sheets.

For the year ended December 31, 2021, income for guarantees purchased by dealers was $5,537. For the year ended December 31, 2021, the net loss resulting from the dealer's exercise of guarantees was immaterial.

As of December 31, 2021, the maximum potential amount of future payments that CarOffer could be required to make under these guarantees was $76,075. Of the maximum potential amount of future payments, none are considered probable. The exercise of guarantees has historically been infrequent and even when such exercises did occur the losses were immaterial. As such, as of December 31, 2021, CarOffer had no contingent loss liabilities.

As of December 31, 2020, the Company did not have any guarantees.

Inventory

The Company’s inventory consists of inventory acquired directly from consumers, at other marketplaces, or in limited situations across all CarOffer transactions, during arbitrations. The inventory is recognized on the balance sheet and is valued at the lower of cost or net realizable value. Cost is determined based on specific identification.

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 on the date of grant using 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. 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 on the date of grant 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, 2021 and 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.

The weighted average assumptions utilized to determine the fair value of options granted during the year ended December 31, 2021 are as follows:


	Year Ended December 31,
	2021
Expected dividend yield		—
Expected volatility		50.95	%
Risk–free interest rate		0.69	%
Expected term (in years)		6.06

During the years ended December 31, 2020 and 2019, no options were granted.

In connection with the Company’s acquisition of a 51% interest in CarOffer, the then-outstanding unvested incentive units (“CO Incentive Units”) of CarOffer and unvested Class CO CarOffer units (the "Subject Units”) remained outstanding and will vest over the requisite service periods as discussed below.

Grants of the CO Incentive Units 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 CO Incentive Units will vest over a period of three (3) years, with one third having vested on January 14, 2022 and one third vesting on each of January 14, 2023 and January 14, 2024, 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 CO Incentive Units 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 CO Incentive Units are forfeited. In addition, if a grantee’s continuous service terminates, then CarOffer has the option to repurchase any outstanding CO Incentive Units 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 Subject Units beneficially owned by Bruce Thompson, the founder and CEO of CarOffer, and certain affiliated persons (collectively, the “T5 Holders”) in connection with the Company’s then-anticipated acquisition of a 51% interest in CarOffer. Pursuant to the Vesting Agreement, 432,592 Subject Units beneficially owned by the T5 Holders vest in three (3) approximately equal installments, with one third having vested on January 14, 2022 and one third vesting on each of January 14, 2023 and January 14, 2024, subject to the terms of the Vesting Agreement. 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).

In connection with the Closing, CarOffer reserved 228,571 incentive units (the "2021 Incentive Units") for purposes of establishing an employee incentive equity plan. Thereafter, CarOffer formed CarOffer Incentive Equity, LLC (“CIE”), a Delaware manager-managed limited liability company managed by the Company, and established the CIE 2021 Equity Incentive Plan (the “2021 CO Plan). The 2021 CO Plan and related documentation, including the applicable award agreement, a vesting agreement between CarOffer and CIE, and the CarOffer Operating Agreement, provide for an incentive equity grant structure whereby 2021 Incentive Units will be granted to CIE and 2021 CO Plan grantees will receive an associated equity interest in CIE (the “CIE Interest”), with back-to-back vesting between the 2021 Incentive Units and the associated CIE Interest. Subject to any modifications as may be approved by the CarOffer Board of Managers in its discretion, grants under the 2021 CO Plan will vest over a period of three (3) years from the grant date, one third each on the first, second, and third anniversaries of the applicable grant date, provided that a grantee’s continuous service to CarOffer has not terminated on the applicable grant date. Upon termination of a grantee’s continuous service to CarOffer, all of such grantee’s unvested 2021 Incentive Units are forfeited. As of December 31, 2021, there had not been any grants of 2021 Incentive Units under the 2021 CO Plan.

CO Incentive Units, Subject Units and 2021 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, Excess Parent Capital (as defined in the CarOffer Operating Agreement), 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.

The Company issues shares of Class A common stock upon the vesting of RSUs and the exercise of stock options out of its shares available for issuance. The Company issues CO Incentive Units and Subject 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 recognized within tax expense. Excess tax benefits recognized on stock‑based compensation expense are classified as an operating activity in the consolidated statements of cash flows.

During the year ended December 31, 2021, the Company recognized $1,179 of tax demerits related to stock-based compensation as compared to immaterial tax demerits during the year ended December 31, 2020 and excess tax benefits of $11,115 recognized during the year ended December 31, 2019.

See Note 10 of these consolidated financial statements for a summary of the stock option, RSU and CO Incentive Unit activity for the year ended December 31, 2021.

Advertising Costs

Advertising costs are expensed as incurred and recognized within sales and marketing expense in the consolidated income statements. For the years ended December 31, 2021, 2020, and 2019, advertising expense was $151,457, $155,580, and $287,107, respectively.

Comprehensive Income

Comprehensive income is defined as the change in stockholders’ equity of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources. Comprehensive income consists of consolidated net income and other comprehensive income (loss), which includes certain changes in equity that are excluded from consolidated net income. Specifically, cumulative foreign currency translation adjustments are included in accumulated other comprehensive (loss) income. As of December 31, 2021 and 2020, accumulated other comprehensive (loss) income is presented separately in the consolidated balance sheets and consists entirely of cumulative foreign currency translation adjustments.

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 in the consolidated financial statements.

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 December 31, 2021, there are no new accounting pronouncements that the Company is considering adopting.

Goodwill and Other Intangible Assets

The Company assessed its goodwill for impairment and did not identify any impairment as of December 31, 2021.For the year ended December 31, 2021, the Company wrote off $647 of U.S. intangible assets within cost of revenue in the consolidated income statements related to certain developed technology which the Company has decided to cease investment.

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.

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

12 Months Ended

Dec. 31, 2021

USD ($)

Goodwill [Line Items]

Balance as of December 31, 2020

$ 29,129

CarOffer acquisition

130,451

^[1]

Foreign currency translation adjustment

(1,293)

Balance at December 31, 2021

158,287

United States

Goodwill [Line Items]

Balance as of December 31, 2020

12,477

CarOffer acquisition

130,451

^[1]

Balance at December 31, 2021

142,928

International

Goodwill [Line Items]

Balance as of December 31, 2020

16,652

Foreign currency translation adjustment

(1,293)

Balance at December 31, 2021

$ 15,359

[1]	See Note 4 of these consolidated financial statements.

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

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

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

As of December 31, 2021 and 2020, accrued expenses, accrued income taxes and other current liabilities consist of the following:


	As of December 31,
	2021		2020
Accrued bonus	$	11,777	$	10,845
Accrued commissions		2,293		3,941
Accrued income taxes		6,344		233
Accrued advertising costs		5,583		—
Accrued distributions to redeemable noncontrolling interest holders		8,701		—
Payments received in advance from third-party payment processor		28,075		—
Other accrued expenses, accrued income taxes and other current liabilities		15,813		9,732
Total	$	78,586	$	24,751

Schedule of Other Non-Current Liabilities

As of December 31, 2021 and 2020, other non-current liabilities consist of the following:


	As of December 31,
	2021		2020
CO Incentive Unit and Subject Unit liability-classified awards	$	21,095	$	—
Other non-current liabilities		2,544		3,075
Total	$	23,639	$	3,075

Fair Value of Financial Instruments Including Cash, Equivalents and Investments - Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments:	$ 90,000	$ 100,000
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments:	$ 90,000	$ 100,000
Debt Securities Held To Maturity Type Extensible List	us-gaap:CertificatesOfDepositMember	us-gaap:CertificatesOfDepositMember
Total	$ 247,525	$ 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	157,525	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:	$ 90,000	$ 100,000
Debt Securities Held To Maturity Type Extensible List	us-gaap:CertificatesOfDepositMember	us-gaap:CertificatesOfDepositMember
Total	$ 90,000	$ 100,000
Fair Value, Measurements, Recurring \| Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	157,525	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:	$ 157,525	$ 112,431

Fair Value of Financial Instruments Including Cash, Equivalents and Investments

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments Including Cash, Equivalents and Investments

Fair Value of Financial Instruments Including Cash Equivalents and Investments

As of December 31, 2021 and 2020, assets measured at fair value on a recurring basis consist of the following:


	As of December 31, 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	$	157,525	$	—	$	—	$	157,525
Investments:
Certificates of deposit		—		90,000		—		90,000
Total	$	157,525	$	90,000	$	—	$	247,525


	As of 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

As of December 31, 2021 and 2020, investments consist of the following:


	As of December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments:
Certificates of deposit due in one year or less	$	90,000	$	—	$	—	$	90,000
Total	$	90,000	$	—	$	—	$	90,000


	As of 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 and Other Non-Current Liabilities

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities and Other Non-Current Liabilities

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

As of December 31, 2021 and 2020, accrued expenses, accrued income taxes and other current liabilities consist of the following:


	As of December 31,
	2021		2020
Accrued bonus	$	11,777	$	10,845
Accrued commissions		2,293		3,941
Accrued income taxes		6,344		233
Accrued advertising costs		5,583		—
Accrued distributions to redeemable noncontrolling interest holders		8,701		—
Payments received in advance from third-party payment processor		28,075		—
Other accrued expenses, accrued income taxes and other current liabilities		15,813		9,732
Total	$	78,586	$	24,751

Accrued distributions to redeemable noncontrolling interest holders relate to mandatory tax distributions to non-controlling interest members for the estimated tax liability on their respective taxable income. Payments received in advance from third-party payment processor relate to payments received in advance of $46,822, offset by receivables in transit from the third-party payment processor of $18,747.

As of December 31, 2021 and 2020, other non-current liabilities consist of the following:


	As of December 31,
	2021		2020
CO Incentive Unit and Subject Unit liability-classified awards	$	21,095	$	—
Other non-current liabilities		2,544		3,075
Total	$	23,639	$	3,075

CO Incentive Unit and Subject Unit liability-classified awards related to liability-classified awards that were recognized in connection with the Company’s acquisition of a 51% interest in CarOffer, as discussed further in Note 2 and Note 10 of these consolidated financial statements.

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

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

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

As of December 31, 2021 and 2020, assets measured at fair value on a recurring basis consist of the following:


	As of December 31, 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	$	157,525	$	—	$	—	$	157,525
Investments:
Certificates of deposit		—		90,000		—		90,000
Total	$	157,525	$	90,000	$	—	$	247,525


	As of 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

As of December 31, 2021 and 2020, investments consist of the following:


	As of December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments:
Certificates of deposit due in one year or less	$	90,000	$	—	$	—	$	90,000
Total	$	90,000	$	—	$	—	$	90,000


	As of 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

Revenue Recognition

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

3. Revenue Recognition

The Company provides disaggregation of revenue based on marketplace, wholesale and product revenue classification on the face of its consolidated income statements and based on geographic region in Note 13 of these consolidated financial statements. The Company 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 (“ASC 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 year 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 December 31, 2021 was approximately $9.2 million, which the Company expects to recognize over the next twelve months.

For contracts with an original expected duration of one year or less, the Company has applied the practical expedient available under ASC 606 to not disclose the amount of transaction price allocated to unsatisfied performance obligations as of December 31, 2021. For performance obligations not satisfied as of December 31, 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 December 31, 2021.

For the year ended December 31, 2021 and 2020, revenue recognized from amounts included in deferred revenue at the beginning of the period was $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. These fee reductions materially and adversely impacted revenue for the year ended December 31, 2020, resulting in an approximately $50 million decrease in marketplace revenue. These fee reductions did not materially impact revenue for the year ended December 31, 2021. During the December 2020 and February 2021 service periods, the Company also suspended charging subscription fees for subscribing dealers in the United Kingdom. These fee reductions are included in the Company’s variable consideration assessment. These fee reductions did not materially impact revenue for the years ended December 31, 2021 and 2020.

- 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=123351226&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=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&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=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Acquisitions

12 Months Ended

Dec. 31, 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 December 31, 2021, the Company incurred total acquisition-related costs of $2,647 related to the CarOffer Acquisition, of which $709 was incurred for the year ended December 31, 2021 and recognized within general and administrative operating expenses in the consolidated income statements. Acquisition-related costs were excluded from the purchase price allocation as they were primarily comprised of legal, professional and consulting expenses.

Total consideration transferred consists of the following:


	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


	Adjusted Fair Value at Date of Acquisition
Cash and cash equivalents	$	5,237
Accounts receivable		16,119
Inventory		2,338
Prepaid expenses, prepaid income taxes and other current assets		95
Property and equipment, net		198
Intangible assets (1)		104,100
Goodwill (2)(4)		130,451
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)(4)		(60,982	)
Total purchase price	$	173,155

(1)

(2)

(3)

(4)

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. On November 23, 2021, the CarOffer Operating Agreement was amended and restated for administrative purposes, including principally to recapitalize certain of the membership units thereunder without changing overall consideration payable by the Company thereunder.

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 their entirety by, the full text of the Purchase Agreement and the CarOffer Operating Agreement, which are filed as exhibits 2.1 and 10.27 to this Annual Report on Form 10-K, respectively.


	Unaudited
	Three Months Ended December 31				Year Ended December 31
	2021		2020		2021		2020
Revenue	$	339,342	$	161,443	$	954,312	$	582,777
Consolidated net income (1)	$	34,158	$	6,626	$	110,055	$	28,415

(1)

$314,430 of revenue and $2,960 of net income attributable to CarOffer is included in our consolidated income statement from the Closing date of January 14, 2021 to December 31, 2021.

Income Taxes - Schedule of Provision for (Benefit from) Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current provision (benefit):
Federal	$ 22,133	$ (3,733)
State	10,438	2,288	$ (220)
Foreign	253	767	513
Current (benefit) provision	32,824	(678)	293
Deferred provision (benefit):
Federal	5,698	19,539	(2,377)
State	669	2,734	(1,306)
Foreign	(204)	(38)	(51)
Deferred provision (benefit)	6,163	22,235	(3,734)
Income tax provision (benefit)	$ 38,987	$ 21,557	$ (3,441)

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
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
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
Commitments and contingencies (Note 9)
Redeemable noncontrolling interest	162,808
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding
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
Class A Common Stock
Stockholders’ equity:
Common stock	102	94
Class B Common Stock
Stockholders’ equity:
Common stock	$ 16	$ 19

Income Taxes - Schedule of Effective Tax Rates (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Effective Income Tax Rate Reconciliation, Percent [Abstract]
U.S. federal taxes at statutory rate	21.00%	21.00%	21.00%
State taxes, net of federal benefit	7.50%	6.20%	0.20%
Nondeductible expenses	0.30%	0.40%	2.90%
Stock compensation	0.30%	0.20%	(22.00%)
Foreign rate differential	(0.20%)	(0.20%)	(0.30%)
Federal and state credits	(2.60%)	(3.20%)	(10.30%)
CARES Act		(2.40%)
Disallowed officer compensation	1.00%
Investment in partnership	(0.30%)
Federal, state, and foreign provision to return differences	(0.70%)
Other	(0.20%)	(0.20%)	(0.20%)
Consolidated effective tax rate	26.10%	21.80%	(8.70%)
Effective tax rate attributable to redeemable noncontrolling interest	0.20%
Effective tax rate attributable to CarGurus, Inc	26.30%	21.80%	(8.70%)

Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property Plant And Equipment [Line Items]
Depreciation	$ 10,324	$ 8,198	$ 7,168
Write-offs in capitalized website development costs		1,151
United States
Property Plant And Equipment [Line Items]
Write-offs in capitalized website development costs	2,481
Capitalized Website Development
Property Plant And Equipment [Line Items]
Increase (decrease) in property and equipment		5,709
Leasehold Improvements
Property Plant And Equipment [Line Items]
Increase (decrease) in property and equipment	3,575
Capitalized Internal-Use Software
Property Plant And Equipment [Line Items]
Increase (decrease) in property and equipment	$ 2,892
Capitalized Internal-Use Software \| Exit of Certain International Markets
Property Plant And Equipment [Line Items]
Write-offs in capitalized website development costs		$ 844

Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Impairment of goodwill	$ 0	$ 0
Amortization of intangible assets	30,152,000	$ 1,993,000	$ 649,000
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Wrote off intangible assets	$ 647,000

Commitments and Contingencies - Additional Information (Details)						12 Months Ended
	Oct. 06, 2021 USD ($) ft²	Jan. 25, 2021 ft²	Dec. 19, 2019 ft²	May 01, 2019	Aug. 12, 2013 ft²	Dec. 31, 2021 USD ($) d	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jan. 14, 2021	Jun. 12, 2020 ft²	Jan. 16, 2020 ft²	Aug. 30, 2019 ft²	Jun. 19, 2018 ft²	Jul. 30, 2016 ft²	Oct. 08, 2014 ft²
Commitments And Contingencies [Line Items]
Operating lease right-of-use assets						$ 60,609,000	$ 60,835,000
Restricted cash						16,336,000	10,627,000
Lease costs						$ 15,844,000	$ 14,157,000	$ 10,260,000
Weighted average remaining lease term						7 years 7 months 6 days	7 years 8 months 12 days
Weighted average discount rate						5.30%	5.30%
Estimated future minimum lease payments not yet commenced						$ 256,525,000
Boston, Massachusetts at 1001 Boylston St
Commitments And Contingencies [Line Items]
Operating lease, office space \| ft²			273,595							225,428
Lessee, operating lease, existence of option to terminate			true
Lessee, operating lease, option to terminate						The “Commencement Date” of the lease term is the earlier to occur of (i) the date that is twelve months following the Delivery Date (as defined in the lease) and (ii) the date that the Company first occupies the premises for the normal conduct of business for the Permitted Use (as defined in the lease). The initial term will commence on the Commencement Date and expire on the date that is one hundred and eighty full calendar months after the Commencement Date (plus the partial month, if any, immediately following the Commencement Date). The lease provides for the option to terminate early under certain circumstances including if there is a material delay in construction (subject to the terms and conditions of the lease), and contains two Company options to extend the lease term (including for a portion of the office space thereunder) for an additional period of five years.
Operating lease, option to extend						contains two Company options to extend the lease term (including for a portion of the office space thereunder) for an additional period of five years.
Cambridge, Massachusetts at 55 Cambridge Parkway
Commitments And Contingencies [Line Items]
Operating lease, office space \| ft²												36,689		51,923
Operating lease, option to extend						option to extend the lease term with respect to a portion of the office space for an additional period of five years
Needham, Massachusetts
Commitments And Contingencies [Line Items]
Lessee, operating lease, existence of option to terminate				true
Lessee, operating lease, renewal term				1 year
San Francisco, California at 332 Pine St
Commitments And Contingencies [Line Items]
Operating lease, office space \| ft²											6,345
Cambridge, Massachusetts at 121 First Street
Commitments And Contingencies [Line Items]
Sublease term description						The Company entered into a noncancelable agreement to sublease the second and third floors and a portion of the first floor to another party on December 23, 2021. The sublease provides for annual rent increases throughout the three-and-a-half-year term of the sublease.
Operating lease, office space \| ft²													48,393
Sublease commenced						2022-01
Operating lease, option to extend						option to extend the lease term for two additional periods of five years each.
Operating sublease, existence of option to extend [true false]						true
Dublin, Ireland
Commitments And Contingencies [Line Items]
Operating lease, office space \| ft²					13,345
Operating lease, rent increasing year					5 years
Cambridge, Massachusetts at 2 Canal Park
Commitments And Contingencies [Line Items]
Sublease term description						Company entered into a one-year non-cancellable sublease for the same 48,059 square feet of office space that will commence on December 1, 2022, after the expiration of the current lease term from another party, with an option to extend the sublease term for an additional period of five years.
Sublease commencement date	Dec. 01, 2022
Operating lease, office space \| ft²	48,059														48,059
Operating lease right-of-use assets	$ 0
Operating lease, option to extend						option to extend the lease term for one additional period of five years.
Car Offer
Commitments And Contingencies [Line Items]
Business acquisition, percentage of interest acquired						51.00%			51.00%
Guarantees, description						CarOffer provides certain guarantees to dealers through its 45-Day Guaranteed Bid and OfferGuard product offerings, which are accounted for under ASC 460. 45-Day Guaranteed Bid is an arrangement through which a selling dealer lists a car on the CarOffer platform, and CarOffer provides an offer to purchase the vehicle listed at a specified price at any time over a 45-day period. This provides the seller with a put option, where they have the right, but not the obligation, to require CarOffer to purchase the vehicle during this window. OfferGuard is an arrangement through which a buying dealer purchases a car on the CarOffer platform, and CarOffer provides an offer to purchase the vehicle at a specified price between days 1 and 3, and days 42 and 45 if the dealer is not able to sell the vehicle after 42 days.
Number of days guarantee period \| d						45
Maximum potential amount of future payments required to make under guarantees						$ 76,075,000
Contingent loss liabilities						$ 0
Guarantees							$ 0
Car Offer \| Addison, Texas at 15601 Dallas Parkway
Commitments And Contingencies [Line Items]
Sublease term description						non-cancellable lease term through 2030
Sublease commencement date		Mar. 01, 2021
Sublease rent commencement date		Jan. 01, 2022
Operating lease, office space \| ft²		61,826
Car Offer \| Addison, Texas at 15601 Dallas Parkway \| Office Space
Commitments And Contingencies [Line Items]
Operating lease right-of-use assets percentage		95.00%
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%

Stock-based Compensation - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Common Stock

Options granted during period

Stock Options

Common Stock

Outstanding, Beginning balance

590,397

Options granted during period

619,618

Exercised

(222,147)

Forfeited

(38,561)

Outstanding, Ending balance

949,307

590,397

Options exercisable

478,588

Weighted-Average Exercise Price for Equity

Outstanding, Beginning balance

$ 1.99

Granted

35.75

Exercised

2.98

Forfeited

35.61

Outstanding, Ending balance

22.42

$ 1.99

Options exercisable

$ 9.28

Outstanding

6 years 8 months 12 days

4 years

Options exercisable

4 years 3 months 18 days

Aggregate Intrinsic Value

Outstanding, Beginning balance

^[1]

$ 17,560

Exercised

6,027

^[1]

$ 8,401

$ 28,902

Outstanding, Ending balance

^[1]

11,877

$ 17,560

Options exercisable

^[1]

$ 11,877

[1]

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Allowance for doubtful accounts	$ 420	$ 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	101,773,034	94,310,309
Common stock, shares outstanding	101,773,034	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	15,999,173	19,076,500
Common stock, shares outstanding	15,999,173	19,076,500

Earnings Per Share - Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
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	617,504
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	2,867,330	2,722,226	1,144,287
Co Incentive Units Subject Units and noncontrolling interest
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	1,509,750

Consolidated Income Statements - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Revenue

Total Revenue

$ 951,373

$ 551,451

$ 588,916

Cost of revenue

Total Cost of revenue

^[1]

294,015

42,706

36,300

Gross profit

657,358

508,745

552,616

Operating expenses:

Sales and marketing

290,574

256,979

393,844

Product, technology, and development

106,423

85,726

69,462

General and administrative

97,678

62,166

50,434

Depreciation and amortization

14,415

6,118

4,554

Total operating expenses

509,090

410,989

518,294

Income from operations

148,268

97,756

34,322

Other income, net:

Interest income

120

1,075

2,984

Other income, net

972

279

1,399

Total other income, net

1,092

1,354

4,383

Income before income taxes

149,360

99,110

38,705

Provision for (benefit from) income taxes

38,987

21,557

(3,441)

Consolidated net income

110,373

77,553

42,146

Net income attributable to redeemable noncontrolling interest

1,129

Net income Attributable to CarGurus, Inc

109,244

77,553

42,146

Accretion of redeemable noncontrolling interest to redemption value

109,398

Net (loss) income attributable to common stockholders

$ (154)

$ 77,553

$ 42,146

Net (loss) income per share attributable to common stockholders: (Note 11)

Basic

$ 0.00

$ 0.69

$ 0.38

Diluted

$ 0.00

$ 0.68

$ 0.37

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

Basic

117,142,062

112,854,524

111,450,443

Diluted

117,142,062

113,849,815

113,431,850

Marketplace

Revenue

Total Revenue

$ 636,942

$ 551,451

$ 588,916

Cost of revenue

Total Cost of revenue

^[1]

47,689

$ 42,706

$ 36,300

Wholesale

Revenue

Total Revenue

195,127

Cost of revenue

Total Cost of revenue

^[1]

127,679

Product

Revenue

Total Revenue

119,304

Cost of revenue

Total Cost of revenue

^[1]

$ 118,647

[1]	Includes depreciation and amortization for the years ended December 31, 2021, 2020, and 2019 of $26,061, $5,224, and $3,263, respectively.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

. Commitments and Contingencies

Contractual Obligations and Commitments

As of December 31, 2021, 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, capitalized website development, capitalized internal-use software and hosting arrangements and amounts related to obligations under finance leases as disclosed in the consolidated statements of cash flows. 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; and Dublin, Ireland. The Company also has an operating lease obligation for data center space in Needham, Massachusetts.

On January 25, 2021, CarOffer entered into a sublease in Addison, Texas at 15601 Dallas Parkway for the lease of 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 is payable from January 1, 2022. The lease provides for annual rent increases through the term of the lease. 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.

On June 12, 2020, the Company amended its operating lease agreement in Boston, Massachusetts at 1001 Boylston Street, which was originally entered into on December 19, 2019 for the lease of 273,595 square feet of office space (the “Original Boston Lease Agreement”). Pursuant to this amendment, the Company exercised its right to reduce the amount of office space agreed to under the lease to 225,428 square feet, and the parties agreed to certain other changes to the lease as set forth in the amendment. The Company is expecting to move into the office space in 2023. As the lease has been signed but the lease term has not commenced, there is no impact to the consolidated financial statements.

The Original Boston Lease Agreement provides for leasehold improvement incentives and provides for annual rent increases through the term of the lease, and provides for variable payments related to management fees. The “Commencement Date” of the lease term is the earlier to occur of (i) the date that is twelve months following the Delivery Date (as defined in the lease) and (ii) the date that the Company first occupies the premises for the normal conduct of business for the Permitted Use (as defined in the lease). The initial term will commence on the Commencement Date and expire on the date that is one hundred and eighty full calendar months after the Commencement Date (plus the partial month, if any, immediately following the Commencement Date). The lease provides for the option to terminate early under certain circumstances including if there is a material delay in construction (subject to the terms and conditions of the lease), and contains two Company options to extend the lease term (including for a portion of the office space thereunder) for an additional period of five years.

On August 30, 2019, the Company amended its operating lease agreement in Cambridge, Massachusetts at 55 Cambridge Parkway, which was originally entered into on March 11, 2016 and subsequently amended on July 30, 2016, for the lease of 51,923 square feet of office space. The 2019 amendment granted the Company an additional 36,689 square feet of office space and extended the non-cancellable lease term through 2025 for the office space currently occupied. The Company accounted for the additional 36,689 square feet of office space as a new lease as it provides an additional right-of-use asset that is not included in the original lease and the additional lease payments were determined to be commensurate with the standalone price of the additional space. The non-cancellable lease term of the additional space ends in 2025, with a portion ending in 2023. The term extension of the existing 51,923 square feet of office space was recognized as a lease modification in the consolidated balance sheet as of December 31, 2019. The lease, as amended, provides for (i) an option to extend the lease term with respect to a portion of the office space for an additional period of five years, (ii) leasehold improvement incentives and (iii) annual rent increases through the term of the lease.

On May 1, 2019, the Company entered into an operating lease in Needham, Massachusetts for the lease of data center space with a non-cancellable term through 2022 with automatic renewal for one year thereafter if not terminated. The lease provides for annual rent increases through the term of the lease.

On January 10, 2019, Auto List, Inc., which the Company acquired on January 16, 2020, entered into an operating lease in San Francisco, California at 332 Pine St. for the lease of 6,345 square feet of office space with a non-cancellable lease term through 2024. The lease provides for annual rent increases through the term of the lease.

On June 19, 2018, the Company entered into an operating lease in Cambridge, Massachusetts at 121 First Street for the lease of 48,393 square feet of office space with a non-cancellable lease term through 2033 with an option to extend the lease term for two additional periods of five years each. The lease provides for leasehold improvement incentives and annual rent increases through the term of the lease. The Company subleased the fifth floor to another party and recognized the sublease income within other income, net in the consolidated income statement. The sublease expired in August 2020. As of December 31, 2020 and 2019, sublease income was immaterial. The Company entered into a noncancelable agreement to sublease the second and third floors and a portion of the first floor to another party on December 23, 2021. The sublease provides for annual rent increases throughout the three-and-a-half-year term of the sublease. The sublease contains a sublessee option to extend the term of the sublease for three additional years, and it includes a sublessee option to expand the sublease to the fourth and fifth floors of the building. The sublease contains both lease and non-lease components in the contract. Non-lease components relate to parking and operating and utilities expenses. As a result of the practical expedient elected under ASC 842, the Company combines the lease and these non-lease components. As the sublease has not yet commenced, there is no impact to the consolidated financial statements. The sublease commenced in January 2022.

On September 26, 2017, the Company assumed an operating lease, which was entered into by the original lessee on August 12, 2013, for the lease of 13,345 square feet of office space in Dublin, Ireland at Styne House, Upper Hatch Street with a non-cancellable term through 2023. The lease provided for a rent increase at the end of year five of the original lease term.

On October 8, 2014, the Company entered into an operating lease in Cambridge, Massachusetts at 2 Canal Park for the lease of 48,059 square feet of office space with a non-cancellable lease term through 2022 with an option to extend the lease term for one additional period of five years. The lease provides for leasehold improvement incentives and annual rent increases through the term of the lease. On October 6, 2021, the Company entered into a one-year non-cancellable sublease for the same 48,059 square feet of office space that will commence on December 1, 2022, after the expiration of the current lease term from another party, with an option to extend the sublease term for an additional period of five years. The sublease is treated as a separate contract from the current lease as the contract was separately negotiated with a new Landlord. As the lease term is 12 months, no additional right-of-use asset will be recognized in line with the Company’s policy in Note 2 of these consolidated financial statements. As the sublease has not yet commenced, there is no impact to the consolidated financial statements.

The Company’s financing lease obligations consist of a lease for furniture and office equipment and are immaterial.

The leases in Boston, Massachusetts, Cambridge, Massachusetts and San Francisco, California have associated letters of credit, which are recognized within restricted cash in the consolidated balance sheets. As of December 31, 2021 and 2020, restricted cash was $16,336 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 and pass-through payments from customers related to the Company's wholesale business. As December 31, 2021 and 2020, portions of restricted cash were classified as a short-term asset and long-term asset, as disclosed in the consolidated balance sheets.

For the years ended December 31, 2021, 2020, and 2019, the Company recognized $15,844, $14,157, and $10,260, respectively, of lease costs for leases that have commenced.

As of December 31, 2021 and 2020, for leases that have commenced the weighted average remaining lease term was 7.6 years and 7.7 years, respectively, and the weighted average discount rate was 5.3% and 5.3%, respectively. As the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. The Company estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term. The Company has no historical debt transactions and a collateralized rate is estimated based on a group of peer companies. The Company used the incremental borrowing rate on January 1, 2019 for leases that commenced prior to that date.

As of December 31, 2021, future minimum lease payments are as follows:


Year Ending December 31,	Operating Lease Commitments
2022	$	16,573
2023		14,736
2024		13,122
2025		6,091
2026		5,540
Thereafter		32,965
Total lease payments		89,027
Less imputed interest		(18,322	)
Total	$	70,705

The chart above does not include options to extend lease terms that are not reasonably certain of being exercised or leases signed but not yet commenced as of December 31, 2021. As of December 31, 2021, total estimated future minimum lease payments for leases signed but not yet commenced, which consists only of the sublease for 2 Canal Park and the 1001 Boylston Street lease and have expected commencement dates in December 2022 and in 2023, respectively, are estimated to be $256,525.

As of December 31, 2021, future minimum lease income payments are as follows:


Year Ending December 31,	Sublease Income Payments
2022	$	882
2023		1,876
2024		1,923
2025		1,021
2026		—
Thereafter		—
Total	$	5,702

Acquisitions

On January 14, 2021 the Company completed the acquisition of a 51% interest in CarOffer, an automated instant vehicle trade platform based in Addison, Texas, with the option to acquire portions of the remaining equity in the future. Details of this acquisition are more fully described in Note 4 of these consolidated financial statements.

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, guarantees, indemnification, and other common provisions.

CarOffer provides certain guarantees to dealers through its 45-Day Guaranteed Bid and OfferGuard product offerings, which are accounted for under ASC 460.

As of December 31, 2021, the maximum potential amount of future payments that CarOffer could be required to make under these guarantees was $76,075. Of the maximum potential amount of future payments, none are considered probable . The exercise of guarantees has historically been infrequent and even when such exercises did occur the losses were immaterial. As such, as of December 31, 2021, CarOffer had no contingent loss liabilities.

As of December 31, 2020, the Company did not have any guarantees.

Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	12 Months Ended
	Jun. 30, 2020	May 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Disaggregation Of Revenue [Line Items]
Performance obligation unsatisfied			$ 9,200
Revenue recognized			$ 9,137	$ 9,984
Marketplace Subscription Revenue
Disaggregation Of Revenue [Line Items]
Decrease in revenue				$ 50,000
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%

Earnings Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share

11. Earnings Per Share

During the years ended December 31, 2021, 2020, and 2019, holders of Class B common stock converted 3,077,327 shares, 1,238,144 shares and 387,440 shares, respectively, of Class B common stock to Class A common stock.

Basic net income per share (“Basic EPS”) is computed by dividing net (loss) 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 (loss) income attributable to common stockholders and adjusted to reflect adjustments for net income (loss) attributable to the noncontrolling interest and redemption adjustments to redeemable noncontrolling interest, if applicable and dilutive, 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.

For the years ended December 31, 2021, 2020, and 2019, a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share is as follows:


	Year Ended December 31,
	2021			2020		2019
Numerator:
Consolidated net income	$	110,373		$	77,553	$	42,146
Net income attributable to redeemable noncontrolling interest		1,129			—		—
Accretion of redeemable noncontrolling interest to redemption value		109,398			—		—
Net (loss) income attributable to common stockholders	$	(154	)	$	77,553	$	42,146
Denominator:
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic		117,142,062			112,854,524		111,450,443
Dilutive effect of share equivalents resulting from stock options		—			674,018		1,155,906
Dilutive effect of share equivalents resulting from unvested restricted stock units (service-based and market-based)		—			321,273		825,501
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — diluted		117,142,062			113,849,815		113,431,850
Net (loss) income per share attributable to common stockholders:
Basic	$	(0.00	)	$	0.69	$	0.38
Diluted	$	(0.00	)	$	0.68	$	0.37


	Year Ended December 31,
	2021		2020		2019
Stock options outstanding		617,504		—		—
Restricted stock units outstanding		2,867,330		2,722,226		1,144,287
CO Incentive Units, Subject Units and noncontrolling interest		1,509,750		—		—

In addition, shares of Class A common stock potentially issuable under market-based performance awards of approximately 14,682 RSUs were excluded from the calculation of weighted average shares used to compute Diluted EPS for the year ended December 31, 2021 as the performance period began subsequent to the reporting period end date and as such there were zero contingently issuable shares.

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Stock Option Activity

During the year ended December 31, 2021, stock option activity is as follows:


	Common Stock			Weighted- Average Exercise Price for Equity		Weighted- Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value(1)
Outstanding, December 31, 2020		590,397		$	1.99		4.0	$	17,560
Granted		619,618			35.75
Exercised		(222,147	)		2.98				6,027
Forfeited		(38,561	)		35.61
Outstanding, December 31, 2021		949,307			22.42		6.7	$	11,877
Options exercisable as of December 31, 2021		478,588			9.28		4.3	$	11,877

(1)

Summary of Restricted Stock Unit Activity

During the year ended December 31, 2021, RSU activity is as follows:


	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Unvested outstanding, December 31, 2020		3,483,816		$	32.52	$	110,538
Granted		2,969,187			33.83
Vested		(1,575,206	)		33.28
Forfeited		(1,043,475	)		33.23
Unvested outstanding, December 31, 2021		3,834,322			33.02	$	128,987

Summary of Stock-based Compensation Expense by Award Type


	Year Ended December 31,
	2021		2020		2019
Options	$	2,471	$	17	$	155
Restricted Stock Units		52,916		45,304		34,146
CO Incentive Units and Subject Units		22,323		—		—
Total stock-based compensation expense	$	77,710	$	45,321	$	34,301

Summary of Allocation of Stock-based Compensation Expense


	Year Ended December 31,
	2021		2020		2019
Cost of revenue	$	417	$	293	$	354
Sales and marketing expense		12,801		10,564		9,989
Product, technology, and development expense		22,289		20,741		15,159
General and administrative expense		42,203		13,723		8,799
Total stock-based compensation expense	$	77,710	$	45,321	$	34,301

Summary of Shares of Common Stock Reserved for Future Issuance

As of December 31, 2021, the Company had reserved the following shares of Class A common stock for future issuance:


Common stock options outstanding			949,307
Restricted stock units outstanding			3,834,322
Shares available for issuance under the 2017 Plan			2,609,854
Total shares of authorized common stock reserved for future issuance			7,393,483

Summary of Significant Accounting Policies - Summary of Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Credit Loss [Abstract]
Balance at Beginning of Period	$ 616	$ 240
Provision	999	1,930	$ 1,091
Write–offs, net of recoveries	(1,195)	(1,554)
Balance at End of Period	$ 420	$ 616	$ 240

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	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Numerator:
Consolidated net income	$ 110,373	$ 77,553	$ 42,146
Net income attributable to redeemable noncontrolling interest	1,129
Accretion of redeemable noncontrolling interest to redemption value	109,398
Net (loss) income attributable to common stockholders	$ (154)	$ 77,553	$ 42,146
Denominator:
Weighted–average number of shares of common stock used in computing net income per share attributable to common stockholders — basic	117,142,062	112,854,524	111,450,443
Dilutive effect of share equivalents resulting from stock options		674,018	1,155,906
Dilutive effect of share equivalents resulting from unvested restricted stock units (service-based and market-based)		321,273	825,501
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders - diluted	117,142,062	113,849,815	113,431,850
Net (loss) income per share attributable to common stockholders:
Basic	$ 0.00	$ 0.69	$ 0.38
Diluted	$ 0.00	$ 0.68	$ 0.37

Income Taxes - Additional Information (Details) - USD ($)		12 Months Ended
	Mar. 27, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Line Items]
Effective tax rate attributable to CarGurus, Inc		26.30%	21.80%	(8.70%)
Change in valuation allowance		$ 71,000	$ 96,000
Deferred tax assets, federal net operating loss carryforwards		1,160,000
Deferred tax assets, state net operating loss carryforwards		$ 17,105,000
Percentage of annual limitation of taxable income		80.00%
Limitation on net operating loss to offset taxable income	80.00%
Liabilities for uncertain tax positions		$ 0	0
Accrued interest or penalties related to uncertain tax positions		0	$ 0
Federal
Income Tax Disclosure [Line Items]
Tax credit carryforwards		$ 673,000
State
Income Tax Disclosure [Line Items]
Operating loss carryforwards expiration year		2040
Tax credit carryforwards		$ 4,516,000
Internal Revenue Service (IRS)
Income Tax Disclosure [Line Items]
Tax credit carryforward limitations on use, cumulative ownership change, period		3 years
Tax credit carryforward, limitations on use		an ownership change, as defined by Section 382, results from transactions that increase the ownership of five-percent stockholders in the stock of a corporation by more than 50 percent in the aggregate over a three-year period.
Open tax year		2017
Internal Revenue Service (IRS) \| Minimum
Income Tax Disclosure [Line Items]
Tax credit carryforward limitations on use, cumulative ownership change percentage		5.00%
Internal Revenue Service (IRS) \| Maximum
Income Tax Disclosure [Line Items]
Tax credit carryforward limitations on use, cumulative ownership change percentage		50.00%
Revenue Commissioners, Ireland \| Foreign
Income Tax Disclosure [Line Items]
Open tax year		2019

Acquisitions - Additional Information (Details) - USD ($)		12 Months Ended
	Jan. 14, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2024	Dec. 31, 2022
Business Acquisition [Line Items]
Stock consideration		$ 103,645,000
Revenue		951,373,000	$ 551,451,000	$ 588,916,000
Net income		$ 109,244,000	$ 77,553,000	$ 42,146,000
Car Offer
Business Acquisition [Line Items]
Business acquisition date	Jan. 14, 2021
Business acquisition, percentage of interest acquired	51.00%	51.00%
Business acquisition, total consideration	$ 173,155,000
Stock consideration	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		314,430,000
Net income		2,960,000
Car Offer \| Class A Common Stock
Business Acquisition [Line Items]
Stock consideration	$ 103,645,000
Business acquisition, stock consideration shares issued	3,115,282
Business acquisition, share price	$ 22.51
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		$ 709,000

Income Taxes - Schedule of Domestic and Foreign Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract]
United States	$ 148,037	$ 97,120	$ 37,476
Foreign	1,323	1,990	1,229
Income before income taxes	$ 149,360	$ 99,110	$ 38,705

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-SubTopic 20
-Section 25
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=123384075&loc=d3e41242-110953

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-URI http://asc.fasb.org/extlink&oid=123367319&loc=SL114868664-224227

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(8))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

Acquisitions - Unaudited Pro Forma Consolidated Financial Information (Parenthetical) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Intangibles amortization			$ 30,152	$ 1,993	$ 649
Stock based compensation			53,525	45,090	$ 34,301
Car Offer
Business Acquisition [Line Items]
Intangibles amortization	$ 7,275	$ 7,275	29,100	29,100
Stock based compensation	$ 12,606	$ 12,606	$ 22,419	$ 22,234

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

The domestic and foreign components of income before income taxes are as follows:


	Year Ended December 31,
	2021		2020		2019
United States	$	148,037	$	97,120	$	37,476
Foreign		1,323		1,990		1,229
Income before income taxes	$	149,360	$	99,110	$	38,705

The provision for (benefit from) income taxes contained the following components:


	Year Ended December 31,
	2021			2020			2019
Current provision (benefit):
Federal	$	22,133		$	(3,733	)	$	—
State		10,438			2,288			(220	)
Foreign		253			767			513
		32,824			(678	)		293
Deferred provision (benefit):
Federal		5,698			19,539			(2,377	)
State		669			2,734			(1,306	)
Foreign		(204	)		(38	)		(51	)
		6,163			22,235			(3,734	)
Income tax provision (benefit)	$	38,987		$	21,557		$	(3,441	)


	Year Ended December 31,
	2021			2020			2019
U.S. federal taxes at statutory rate		21.0	%		21.0	%		21.0	%
State taxes, net of federal benefit		7.5			6.2			0.2
Nondeductible expenses		0.3			0.4			2.9
Stock compensation		0.3			0.2			(22.0	)
Foreign rate differential		(0.2	)		(0.2	)		(0.3	)
Federal and state credits		(2.6	)		(3.2	)		(10.3	)
CARES Act		—			(2.4	)		—
Disallowed officer compensation		1.0			—			—
Investment in partnership		(0.3	)		—			—
Federal, state, and foreign provision to return differences		(0.7	)		—			—
Other		(0.2	)		(0.2	)		(0.2	)
Consolidated effective tax rate		26.1	%		21.8	%		(8.7	)%
Effective tax rate attributable to redeemable noncontrolling interest		0.2			—			—
Effective tax rate attributable to CarGurus, Inc.		26.3	%		21.8	%		(8.7	)%

As of December 31, 2021 and 2020, the approximate income tax effect of each type of temporary difference and carryforward is as follows:


	As of December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	1,429		$	3,735
Credit carryforwards		4,241			17,572
Stock-based compensation		5,301			4,796
Lease liability		15,640			18,671
Investment in partnership		6,709			—
Accruals and reserves		5,942			3,249
		39,262			48,023
Valuation Allowance		(229	)		(158	)
		39,033			47,865
Deferred tax liabilities:
Prepaid expenses		(1,850	)		(1,482	)
Deferred commissions		(3,508	)		(5,144	)
Right of use assets		(12,955	)		(15,920	)
Intangible assets		(1,111	)		(1,025	)
Fixed assets		(6,289	)		(4,811	)
		(25,713	)		(28,382	)
Net deferred tax assets	$	13,320		$	19,483

The Company accounts for income taxes in accordance with the liability method. Under this method, deferred income taxes are recognized for the future tax consequences of differences between the tax and financial accounting bases of assets and liabilities at each reporting period. Deferred income taxes are based on enacted tax laws and statutory tax rates applicable to the period in which these differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized.

As of December 31, 2021 and 2020, the Company has provided an immaterial valuation allowance against its net deferred tax assets. Based upon the level of historical U.S. earnings and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, with the exception of the deferred tax asset related to intangible assets in Ireland. For the years ended December 31, 2021 and 2020, the change in the valuation allowance was $71 and $96, respectively.

As of December 31, 2021, the Company has federal and state net operating loss (“NOL”) carryforwards of $1,160 and $17,105, respectively. Prior to the enactment of the CARES Act on March 27, 2020, federal NOLs would generally carryforward indefinitely, subject to an annual limitation of 80% of taxable income. The CARES Act temporarily removed the 80% limitation on NOLs to offset taxable income for tax years prior to 2021. The 80% annual taxable income limitation will resume for tax years 2021 and on. The federal NOL carryforward does not expire and the state NOL carryforwards, excluding South Carolina which carryforwards indefinitely, expire at various dates through 2040. As of December 31, 2021, the Company has federal and state tax credit carryforwards of $673 and $4,516, respectively, available to reduce future tax liabilities that, excluding California which carryforwards indefinitely, expire at various dates through 2040. Utilization of the NOL and tax credit carryforwards, respectively, may be subject to an annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code (“Section 382”), as well as similar state provisions. Ownership changes may limit the amount of NOL or tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of five-percent stockholders in the stock of a corporation by more than 50 percent in the aggregate over a three-year period.

The Company previously adopted the provision for uncertain tax positions under ASC 740. As of December 31, 2021 and 2020, the Company had no recognized liabilities for uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions.

The Company permanently reinvests the earnings, if any, of its foreign subsidiaries and, therefore, does not provide for U.S. income taxes that could result from the distribution of those earnings to the Company. As of December 31, 2021 and December 31, 2020, the amount of unrecognized deferred U.S. taxes on these earnings would be de minimis.

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 2019 and after.

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Goodwill and Other Intangible Assets - Summary of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
2022	$ 30,782
2023	30,118
2024	4,082
2025	3,045
2026	3,045
Thereafter	12,843
Net Carrying Amount	$ 83,915	$ 10,862

Segment and Geographic Information

12 Months Ended

Dec. 31, 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, wholesale and product revenues from customers within the United States. The International segment derives revenues from marketplace 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 recognized for statutory reporting purposes. Asset information is assessed and reviewed on a global basis.

For the years ended December 31, 2021, 2020, and 2019, information regarding the Company’s operations by segment and geographical area is as follows:


	Year Ended December 31,
	2021		2020		2019
Segment revenue:
United States	$	909,033	$	519,835	$	555,007
International		42,340		31,616		33,909
Total revenue	$	951,373	$	551,451	$	588,916


	Year Ended December 31,
	2021			2020			2019
Segment income (loss) from operations:
United States	$	158,532		$	120,836		$	73,872
International		(10,264	)		(23,080	)		(39,550	)
Total income from operations	$	148,268		$	97,756		$	34,322

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

As of December 31, 2021, total assets held outside of the United States were $35,521, primarily attributable to $15,359 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.

- 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
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

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

Dec. 31, 2021

Jan. 14, 2021

Dec. 31, 2020

Business Acquisition [Line Items]

Goodwill

$ 158,287

$ 29,129

Car Offer

Business Acquisition [Line Items]

Cash and cash equivalents

$ 5,237

Accounts receivable

16,119

Inventory

2,338

Prepaid expenses, prepaid income taxes and other current assets

Property and equipment, net

198

Intangible assets

^[1]

104,100

Goodwill

^[2],[3]

130,451

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],[4]

(60,982)

Total purchase price

$ 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, $28,991 of the goodwill is deductible under IRC Section 197. In connection with the transaction, the Company accelerated certain stock options deemed to be outside of consideration transferred. Therefore, for the year ended December 31, 2021, the Company recognized an additional $1,229 of stock-based compensation expense
[3]	The Company finalized its assessment of the significant inputs utilized in the Least Square Monte Carlo Simulation for the fair value of the redeemable noncontrolling interest and recognized an adjustment of $2,951 during the year ended December 31, 2021.
[4]	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.

Property and Equipment, Net

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

As of December 31, 2021 and 2020, property and equipment, net consist of the following:


	As of December 31,
	2021			2020
Server and computer equipment	$	8,349		$	8,108
Capitalized internal-use software		3,041			149
Capitalized website development		22,037			16,328
Furniture and fixtures		8,615			7,320
Leasehold improvements		24,082			20,507
Construction in progress		854			1,024
Finance lease right-of-use assets		556			41
		67,534			53,477
Less accumulated depreciation and amortization		(35,324	)		(25,994	)
Property and equipment, net	$	32,210		$	27,483

For the year ended December 31, 2021, 2020, and 2019, depreciation and amortization expense, excluding amortization of intangible assets, amortization of capitalized hosting arrangements, and write offs, was $10,324, $8,198 and $7,168, respectively.

For the year ended December 31, 2021, the Company wrote off $2,481 of U.S. capitalized website development costs within operating expense in the consolidated income statements related to certain developed technology in which the Company has decided to cease investment. For the year ended December 31, 2020, the Company wrote off $1,151 of capitalized website development costs, of which $844 related to the exit of certain international markets in connection with the Expense Reduction Plan.

Capitalized website development costs increased $5,709 due to continued investment in our product offerings. Leasehold improvements costs increased $3,575 due to the costs associated with the additional leased space in 55 Cambridge Parkway, as discussed further in Note 9 of these consolidated financial statements. Capitalized internal-use software costs increased $2,892 due to additions related to internal engineering and development tools.

Summary of Significant Accounting Policies - Weighted Average Assumptions Utilized to Determine Fair Value of Options Granted (Details)	12 Months Ended
	Dec. 31, 2021
Accounting Policies [Abstract]
Expected volatility	50.95%
Risk-free interest rate	0.69%
Expected term (in years)	6 years 21 days

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Changes in Carrying Value of Goodwill

As of December 31, 2021, changes in the carrying value of goodwill are as follows:


	United States		International			Total
Balance as of December 31, 2020	$	12,477	$	16,652		$	29,129
CarOffer acquisition (1)		130,451		—			130,451
Foreign currency translation adjustment		—		(1,293	)		(1,293	)
Balance as of December 31, 2021	$	142,928	$	15,359		$	158,287

(1)

See Note 4 of these consolidated financial statements.

Summary of Other Intangible Assets

As of December 31, 2021 and 2020, intangible assets consist of the following:


	As of December 31, 2021
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Impairment		Net Carrying Amount
Brand		9.4	$	32,274	$	4,206	$	—	$	28,068
Customer relationships		2.0		19,870		7,314		—		12,556
Developed technology		2.0		65,212		21,274		647		43,291
Total			$	117,356	$	32,794	$	647	$	83,915


	As of December 31, 2020
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Impairment		Net Carrying Amount
Brand		8.4	$	9,405	$	1,235	$	—	$	8,170
Customer relationships		1.6		1,886		938		—		948
Developed technology		2.4		2,213		469		—		1,744
Total			$	13,504	$	2,642	$	—	$	10,862

Summary of Estimated Amortization Expense of Intangible Assets

As of December 31, 2021, estimated amortization expense of intangible assets for future periods is as follows:


Year Ending December 31,	Amortization Expense
2022		30,782
2023		30,118
2024		4,082
2025		3,045
2026		3,045
Thereafter		12,843
Total	$	83,915

Commitments and Contingencies - Summary of Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Operating Lease Commitments
2022	$ 16,573
2023	14,736
2024	13,122
2025	6,091
2026	5,540
Thereafter	32,965
Total lease payments	89,027
Less imputed interest	(18,322)
Total	$ 70,705

Segment and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Summary of Operations by Segment and Geographical Area

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


	Year Ended December 31,
	2021		2020		2019
Segment revenue:
United States	$	909,033	$	519,835	$	555,007
International		42,340		31,616		33,909
Total revenue	$	951,373	$	551,451	$	588,916


	Year Ended December 31,
	2021			2020			2019
Segment income (loss) from operations:
United States	$	158,532		$	120,836		$	73,872
International		(10,264	)		(23,080	)		(39,550	)
Total income from operations	$	148,268		$	97,756		$	34,322

Stock-based Compensation - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Jan. 03, 2022

Aug. 22, 2016

Aug. 15, 2015

Jun. 26, 2015

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Oct. 16, 2017

Jun. 21, 2017

Dec. 31, 2006

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of options granted in period

Stock-based compensation expense

$ 77,710

$ 45,321

$ 34,301

Capitalized website development and internal-use software costs excluded from stock-based compensation expense

3,247

1,906

1,381

Income tax benefit from stock-based compensation expense

5,301

4,796

2,953

Total payments for employees' tax obligations to taxing authorities due to net share settlements and cashless exercises of options

$ 15,388

$ 11,184

$ 16,470

Stock Options

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of options granted in period

619,618

Aggregate intrinsic value for options exercised

$ 6,027

^[1]

$ 8,401

$ 28,902

Unrecognized stock-based compensation expense related to unvested stock options

$ 7,507

Unrecognized stock-based compensation expense, expected period for recognition

3 years 2 months 12 days

Stock-based compensation expense

$ 2,471

$ 17

$ 155

RSUs

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of RSUs granted in period

2,969,187

Unvested units

3,834,322

3,483,816

Weighted average grant date fair value of RSUs granted

$ 33.83

$ 28.47

$ 39.07

Number of RSUs vested and settled during period

1,347,464

1,317,736

Total fair value of RSUs vested

$ 40,613

$ 31,533

Unrecognized stock-based compensation expense related to RSUs

$ 106,888

Unrecognized stock-based compensation expense, expected period for recognition

2 years 9 months 18 days

Stock-based compensation expense

$ 52,916

$ 45,304

$ 34,146

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

527,237

447,160

452,678

2020 CO Plan | Incentive Units

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

485,714

Number of shares available for issuance during period

Accelerated and redeemed units

142,857

Unvested units

342,857

Unrecognized stock based compensation expense related to unvested units

$ 18,640

Unrecognized stock-based compensation expense, expected period for recognition

2 years 6 months

Stock-based compensation expense

$ 1,229

Vesting Agreement | Subject Units

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares available for issuance during period

Units issued and unvested

432,592

Unrecognized stock based compensation expense related to unvested units

$ 29,507

Unrecognized stock-based compensation expense, expected period for recognition

2 years

2021 CO Plan

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

228,571

2021 CO Plan | Incentive Units

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

228,571

Number of shares available for issuance during period

228,571

2006 Plan

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Stock options, granted

Number of RSUs granted in period

2006 Plan | Class B Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

3,444,668

2015 Plan

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

603,436

Term of authorized shares

10 years

Award expiration date

Aug. 21, 2026

Equity Incentive Plan, plan modification, description and terms

(1) the number of shares of Class A common stock was increased, on a share for share basis, by the number of shares of Class B common stock that were (a) subject to outstanding options granted under the 2006 Plan that expired, terminated, or were cancelled for any reason without having been exercised, (b) surrendered in payment of the exercise price of outstanding options granted under the 2006 Plan or (c) withheld in satisfaction of tax withholding upon exercise of outstanding options granted under the 2006 Plan, and the number of shares of Class B common stock reserved under the amended and restated 2015 Plan was decreased, on a corresponding share for share basis, (2) no new awards of Class B common stock could be granted under the amended and restated 2015 Plan, and (3) except with respect to outstanding options granted under the 2006 Plan that were exercised on or after the date of the amendment and restatement, no Class B common stock could be issued under the 2015 Plan.

2015 Plan | Class B Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

5,161,644

Number of additional shares authorized

802,562

2015 Plan | Class B Common Stock | Stock Options

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares called by each instrument

2015 Plan | Class B Common Stock | RSUs

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares called by each instrument

2015 Plan | Class A Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

3,181,740

Number of additional shares authorized

618,691

2015 Plan | Class A Common Stock | Stock Options

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares called by each instrument

2015 Plan | Class A Common Stock | RSUs

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares called by each instrument

2017 Plan

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of additional shares authorized

6,000,000

Equity incentive plan, issuance of additional shares, description and terms

Unless determined otherwise by the Compensation Committee of the Board, as of the first trading day of January of each calendar year during the term of the 2017 Plan (excluding any extensions), eligible beginning with calendar year 2019, an additional number of shares of Class A common stock will be added to the number of shares of the Company’s Class A common stock authorized to be issued or transferred under the 2017 Plan and the number of shares authorized to be issued or transferred pursuant to incentive stock options, equal to 4% of the total number of shares of our Class A common stock outstanding on the last trading day in December of the immediately preceding calendar year, or 6,000,000 shares, whichever is less, or such lesser amount as determined by the Board (the “Evergreen Increase”). The Compensation Committee of the Board determined to not effectuate the Evergreen Increase that was otherwise scheduled to have occurred on each of January 2, 2019, January 2, 2020 and January 4, 2021. On January 3, 2022, an additional 4,070,921 shares of the Company's Class A Common Stock was authorized to be issued or transferred under the 2017 Plan pursuant to the Evergreen Increase.

2017 Plan | Subsequent Event

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of additional shares authorized

4,070,921

2017 Plan | Class A Common Stock

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Equity incentive plan, additional shares authorized percentage

4.00%

Number of shares available for issuance during period

2,609,854

2017 Plan | Class A Common Stock | Maximum

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

12,300,000

2017 Plan | Class A Common Stock | Awarded Under 2017 Plan

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

7,800,000

2017 Plan | Class A Common Stock | Awarded Under 2015 Plan

Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]

Number of shares authorized for issuances

4,500,000

[1]

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

Principles of Consolidation

The accompanying 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

Use of Estimates

Concentration of Credit Risk

For the years ended December 31, 2021, 2020, and 2019, no individual customer accounted for more than 10% of total revenue.

Cash, Cash Equivalents, and Investments

Restricted Cash

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded based on the amount due from the customer and a third-party payment processor. Accounts receivable do not bear interest.

As of December 31, 2021 and 2020, changes in the Company’s allowance for doubtful accounts are as follows:


	Balance at Beginning of Period		Provision		Write–offs, net of recoveries			Balance at End of Period
Year ended December 31, 2021	$	616	$	999	$	(1,195	)	$	420
Year ended December 31, 2020		240		1,930		(1,554	)		616

Property and Equipment


		Estimated Useful Life (In Years)
Server and computer equipment		3
Capitalized internal-use software		3
Capitalized website development		3
Furniture and fixtures		5
Right-of-use assets		Lease term, or asset life if shorter
Leasehold improvements		Lease term, or asset life if shorter

Expenditures for repairs and maintenance are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

Impairment of Long‑Lived Assets

Capitalized Website Development and Capitalized Internal-Use Software Costs

Capitalized Hosting Arrangements

Business Combinations

Valuation of Acquired Assets and Liabilities

Intangible Assets

Goodwill

For the years ended December 31, 2021 and 2020, the Company did not identify any impairment of its goodwill.

Redeemable Noncontrolling Interest

Leases

Contingent Liabilities

Income Taxes

Fair Value of Financial Instruments

Level 1 — Quoted unadjusted prices for identical instruments in active markets.

Level 3 — Model‑derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company.

Foreign Currency Translation

Revenue Recognition

Sources of Revenue

Revenue Recognition

1) Identify the contract with a customer

2) Identify the performance obligations in the contract

3) Determine the transaction price

4) Allocate the transaction price to performance obligations in the contract

5) Recognize revenue when or as the Company satisfies a performance obligation

Marketplace Revenue - Description

Dealer customers do not have the right to take possession of the Company’s software.

The Company also offers paid Listings packages for the Autolist website and paid Listings and advertising products for the PistonHeads website.

Customers are billed monthly in arrears and payment terms are generally thirty to sixty days from the date invoiced.

The Company also offers non-dealer advertising products for the Autolist and PistonHeads websites.

Marketplace Revenue - Revenue Recognition

For advertising revenue, the performance obligation is to publish the agreed upon campaign on the Company’s websites and load the related impressions.

As consideration is driven by the number of impressions delivered on the CarGurus websites, the consideration for each period is allocated to the period in which the service was rendered.

Wholesale Revenue - Description

Wholesale Revenue - Revenue Recognition

Wholesale revenue is presented net of any taxes collected from customers.

Product Revenue - Description

Product - Revenue Recognition

Contracts with Multiple Performance Obligations

Costs to Obtain a Contract

Deferred Revenue

Marketplace Cost of Revenue

Wholesale Cost of Revenue

Product Cost of Revenue

Guarantees

CarOffer provides certain guarantees to dealers through its 45-Day Guaranteed Bid and OfferGuard product offerings, which are accounted for under ASC Topic 460, Guarantees ("ASC 460").

As of December 31, 2020, the Company did not have any guarantees.

Inventory

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.

The weighted average assumptions utilized to determine the fair value of options granted during the year ended December 31, 2021 are as follows:


	Year Ended December 31,
	2021
Expected dividend yield		—
Expected volatility		50.95	%
Risk–free interest rate		0.69	%
Expected term (in years)		6.06

During the years ended December 31, 2020 and 2019, no options were granted.

See Note 10 of these consolidated financial statements for a summary of the stock option, RSU and CO Incentive Unit activity for the year ended December 31, 2021.

Advertising Costs

Comprehensive Income

Recent Accounting Pronouncements Adopted

Income Taxes

Recent Accounting Pronouncements Not Yet Adopted

Earnings Per Share - Additional Information (Details)	12 Months Ended
Earnings Per Share - Additional Information (Details)	Dec. 31, 2021 Vote shares	Dec. 31, 2020 shares	Dec. 31, 2019 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 Award RSU
Earnings Per Share Basic [Line Items]
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding	14,682
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	3,077,327	1,238,144	387,440
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

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Summary of Future Minimum Lease Payments

uture minimum lease payments are as follows:


Year Ending December 31,	Operating Lease Commitments
2022	$	16,573
2023		14,736
2024		13,122
2025		6,091
2026		5,540
Thereafter		32,965
Total lease payments		89,027
Less imputed interest		(18,322	)
Total	$	70,705

Schedule of Future Minimum Sublease Income Payments

As of December 31, 2021, future minimum lease income payments are as follows:


Year Ending December 31,	Sublease Income Payments
2022	$	882
2023		1,876
2024		1,923
2025		1,021
2026		—
Thereafter		—
Total	$	5,702

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

12 Months Ended

Jan. 14, 2021

Dec. 31, 2021

Business Acquisition [Line Items]

Intangible assets

^[1]

$ 104,100

Goodwill estimated to be deductible under IRC Section 197

28,991

Additional stock-based compensation expense

$ 1,229

Fair value of redeemable noncontrolling interest adjustment recognized

2,951

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]

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 67,534	$ 53,477
Less accumulated depreciation and amortization	(35,324)	(25,994)
Property and equipment, net	32,210	27,483
Server and Computer Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	8,349	8,108
Capitalized Internal-Use Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	3,041	149
Capitalized Website Development
Property Plant And Equipment [Line Items]
Property and equipment, gross	22,037	16,328
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	8,615	7,320
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	24,082	20,507
Construction in Progress
Property Plant And Equipment [Line Items]
Property and equipment, gross	854	1,024
Finance Lease Right-of-use Assets
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 556	$ 41

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities and Other Non-Current Liabilities - Schedule of Accrued Expenses, Accrued Income Taxes and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Accrued bonus	$ 11,777	$ 10,845
Accrued commissions	2,293	3,941
Accrued income taxes	6,344	233
Accrued advertising costs	5,583
Accrued distributions to redeemable noncontrolling interest holders	8,701
Payments received in advance from third-party payment processor	28,075
Other accrued expenses, accrued income taxes and other current liabilities	15,813	9,732
Total	$ 78,586	$ 24,751

Commitment and Contingencies - Schedule of Future Minimum Sublease Income Payments (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2022	$ 882
2023	1,876
2024	1,923
2025	1,021
Total	$ 5,702

Accrued Expenses, Accrued Income Taxes and Other Current Liabilities and Other Non-Current Liabilities - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 14, 2021
Business Acquisition [Line Items]
Payments received in advance from third-party payment, gross	$ 46,822
Receivables in transit from third-party payment	$ 18,747
Car Offer
Business Acquisition [Line Items]
Business acquisition, percentage of interest acquired	51.00%	51.00%

Consolidated Statements of Stockholders' Equity (Parenthetical)	Dec. 31, 2021	Jan. 14, 2021
Car Offer
Business acquisition, percentage of interest acquired	51.00%	51.00%

Stock-based Compensation - Summary of Allocation of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 77,710	$ 45,321	$ 34,301
Cost of Revenue
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	417	293	354
Sales and Marketing Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	12,801	10,564	9,989
Product, Technology, and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	22,289	20,741	15,159
General and Administrative Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 42,203	$ 13,723	$ 8,799

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

7. Goodwill and Other Intangible Assets

Goodwill

As of December 31, 2021, changes in the carrying value of goodwill are as follows:


	United States		International			Total
Balance as of December 31, 2020	$	12,477	$	16,652		$	29,129
CarOffer acquisition (1)		130,451		—			130,451
Foreign currency translation adjustment		—		(1,293	)		(1,293	)
Balance as of December 31, 2021	$	142,928	$	15,359		$	158,287

(1)

See Note 4 of these consolidated financial statements.

The Company assessed its goodwill for impairment and did not identify any impairment as of December 31, 2021.

Other Intangible Assets

As of December 31, 2021 and 2020, intangible assets consist of the following:


	As of December 31, 2021
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Impairment		Net Carrying Amount
Brand		9.4	$	32,274	$	4,206	$	—	$	28,068
Customer relationships		2.0		19,870		7,314		—		12,556
Developed technology		2.0		65,212		21,274		647		43,291
Total			$	117,356	$	32,794	$	647	$	83,915


	As of December 31, 2020
	Weighted Average Remaining Useful Life (years)		Gross Carrying Amount		Accumulated Amortization		Impairment		Net Carrying Amount
Brand		8.4	$	9,405	$	1,235	$	—	$	8,170
Customer relationships		1.6		1,886		938		—		948
Developed technology		2.4		2,213		469		—		1,744
Total			$	13,504	$	2,642	$	—	$	10,862

For the year ended December 31, 2021, 2020, and 2019, amortization of intangible assets was $30,152, $1,993, and $649, respectively.

For the year ended December 31, 2021, the Company wrote off $647 of U.S. intangible assets within cost of revenue in the consolidated income statements related to certain developed technology which the Company has decided to cease investment.

As of December 31, 2021, estimated amortization expense of intangible assets for future periods is as follows:


Year Ending December 31,	Amortization Expense
2022		30,782
2023		30,118
2024		4,082
2025		3,045
2026		3,045
Thereafter		12,843
Total	$	83,915