8-K
0001494259false00014942592022-08-082022-08-08

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

Date of Report (Date of earliest event reported): August 8, 2022

 

CarGurus, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-38233

04-3843478

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

2 Canal Park, 4th Floor

Cambridge, Massachusetts 02141

(Address of Principal Executive Offices)

 

(Zip Code)

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

Not Applicable

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

 

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

 

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

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

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

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

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

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock,
par value $0.001 per share

 

CARG

 

The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

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

Emerging growth company

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

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On August 8, 2022, CarGurus, Inc. (the “Company”) announced its financial results for the quarter ended June 30, 2022. The full text of the press release issued by the Company in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

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

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

No.

 

Description

99.1

 

Press Release of CarGurus, Inc. dated August 8, 2022, reporting its financial results for the quarter ended June 30, 2022, furnished hereto.

104

 

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

 

 


 

SIGNATURES

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

 

 

 

CARGURUS, INC.

 

 

 

 

Date: August 8, 2022

 

By:

/s/ Scot Fredo

 

 

 

Name: Scot Fredo

 

 

 

Title: Chief Financial Officer

 

 


EX-99.1

 

Exhibit 99.1

https://cdn.kscope.io/65004cbcc8a1473ac6c76a484d6d25f6-img239243378_0.jpg 

 

CarGurus Announces Second Quarter 2022 Results

Second Quarter Highlights:

Total revenue of $511.2 million, an increase of 135% year-over-year
GAAP operating income of $23.5 million; non-GAAP operating income of $57.7 million
GAAP consolidated net income of $18.1 million; non-GAAP consolidated net income of $44.7 million
GAAP net (loss) income attributable to common stockholders of ($10.3) million; non-GAAP net income attributable to common stockholders of $38.0 million
Cash, cash equivalents and short-term investments of $368.2 million and no debt
Consolidated Adjusted EBITDA of $61.2 million; Adjusted EBITDA of $54.0 million

CAMBRIDGE, MA: August 8, 2022 — CarGurus, Inc. (Nasdaq: CARG), a multinational, online automotive platform for buying and selling vehicles, today announced financial results for the second quarter ended June 30, 2022.

"We have achieved exceptional results for the second quarter of 2022," said Jason Trevisan, Chief Executive Officer of CarGurus. "The strength in our performance was driven by the acquisition of new dealers and reengagement of returning dealers on our foundational listings business, operational improvements for our CarOffer business, and launch of our innovative Digital Retail product offerings. The combination of our foundational listings business, coupled with Digital Wholesale, and Digital Retail allows us to create a transaction-enabled platform that holistically serves both our dealer partners and largest consumer audience. Looking ahead to the second half of 2022, we are marching towards fulfilling our vision of creating the only platform where dealers can source, market, and sell and consumers can shop, finance, buy and sell."

Revenue

Total revenue was $511.2 million, an increase of 135% compared to $217.7 million in the second quarter of 2021.

Marketplace revenue was $163.9 million, an increase of 2% compared to $160.5 million in the second quarter of 2021.

Wholesale revenue was $75.9 million, an increase of 42% compared to $53.5 million in the second quarter of 2021.

Product revenue was $271.4 million, an increase of 7,087% compared to $3.8 million in the second quarter of 2021.

Operating Income

GAAP operating income was $23.5 million, a decrease of (39%) compared to $38.5 million in the second quarter of 2021.

Non-GAAP operating income was $57.7 million, a decrease of (16%) compared to $68.9 million in the second quarter of 2021.

 


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

GAAP consolidated net income was $18.1 million compared to $27.4 million in the second quarter of 2021.

Non-GAAP consolidated net income was $44.7 million compared to $51.8 million in the second quarter of 2021.

GAAP net (loss) income attributable to common stockholders was ($10.3) million, or ($0.09) per fully diluted share, compared to $28.1 million, or $0.23 per fully diluted share, in the second quarter of 2021.

Non-GAAP net income attributable to common stockholders was $38.0 million, or $0.32 per fully diluted share, compared to $46.9 million, or $0.39 per fully diluted share, in the second quarter of 2021.

Consolidated Adjusted EBITDA, a non-GAAP metric, was $61.2 million compared to $71.2 million in the second quarter of 2021.

Adjusted EBITDA, a non-GAAP metric, was $54.0 million compared to $66.4 million in the second quarter of 2021.

Balance Sheet and Cash Flow

As of June 30, 2022, CarGurus had cash, cash equivalents and short-term investments of $368.2 million and no debt.

CarGurus used ($5.5) million in cash from operations and ($9.9) million in free cash flow, a non-GAAP metric, during the second quarter of 2022, compared to having generated $37.5 million in cash from operations and $32.9 million in free cash flow during the second quarter of 2021.

Second Quarter Business Metrics(1)

Total paying dealers were 31,143 at June 30, 2022, an increase of 1% compared to 30,727 at June 30, 2021. Of the total paying dealers at June 30, 2022, U.S. and International accounted for 24,488 and 6,655, respectively, compared to 23,950 and 6,777, respectively, at June 30, 2021.

Quarterly Average Revenue per Subscribing Dealer (“QARSD”) in the U.S. was $5,771 as of June 30, 2022, an increase of 4% compared to $5,550 as of June 30, 2021.

QARSD in International markets was $1,533 as of June 30, 2022, an increase of 3% compared to $1,491 as of June 30, 2021.

Website traffic and consumer engagement metrics for the second quarter of 2022 were as follows:

o
U.S. average monthly unique users were 29.5 million, a decrease of (10%) compared to 32.8 million in the second quarter of 2021.
o
U.S. average monthly sessions were 80.1 million, a decrease of (1%) compared to 81.1 million in the second quarter of 2021.
o
International average monthly unique users were 6.6 million, a decrease of (15%) compared to 7.8 million in the second quarter of 2021.
o
International average monthly sessions were 14.9 million, a decrease of (17%) compared to 18.0 million in the second quarter of 2021.

 

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

 


Updated Non-GAAP Net Income Attributable to Common Stockholders Calculation
(in thousands)

Primarily due to our recent strategic transactional activity, we have updated our non-GAAP net income, non-GAAP basic earnings per share, and non-GAAP diluted earnings per share calculation methodology. For each of the quarters ended March 31, 2021, June 30, 2021, September 30, 2021, December 31, 2021, and March 31, 2022, and the year ended December 31, 2021, we have recalculated previously reported figures under our new methodology, as presented below. Our updated calculation methodology now reflects consideration of hypothetical income tax effects on applicable non-GAAP adjustments by creating a separate non-GAAP income tax provision and comparing it to our quarterly GAAP tax provision to isolate the hypothetical tax impact of our aggregate non-GAAP adjustments. None of these updates impact our consolidated financial results as calculated under GAAP. This updated methodology is utilized in the current period and, unless noted otherwise, will be utilized for all future periods.
 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Year Ended

 

 

Three Months Ended

 

 

 

March 31,

 

 

June 30,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2022

 

GAAP consolidated net income

 

$

19,551

 

 

$

27,396

 

 

$

29,267

 

 

$

34,159

 

 

$

110,373

 

 

$

18,838

 

Stock-based compensation expense

 

 

15,393

 

 

 

22,540

 

 

 

15,169

 

 

 

24,608

 

 

 

77,710

 

 

 

27,842

 

Amortization of intangible assets

 

 

6,646

 

 

 

7,858

 

 

 

7,854

 

 

 

7,794

 

 

 

30,152

 

 

 

7,705

 

Acquisition-related expenses

 

 

644

 

 

 

65

 

 

 

 

 

 

 

 

 

709

 

 

 

 

Income tax effects and adjustments

 

 

(5,494

)

 

 

(6,099

)

 

 

(6,135

)

 

 

(4,790

)

 

 

(22,518

)

 

 

(7,864

)

Non-GAAP consolidated net income

 

 

36,740

 

 

 

51,760

 

 

 

46,155

 

 

 

61,771

 

 

 

196,426

 

 

 

46,521

 

Non-GAAP net loss (income) attributable to redeemable noncontrolling interest(1)

 

 

25

 

 

 

(4,834

)

 

 

(3,259

)

 

 

(12,103

)

 

 

(20,171

)

 

 

(7,073

)

Non-GAAP net income attributable to common stockholders

 

$

36,765

 

 

$

46,926

 

 

$

42,896

 

 

$

49,668

 

 

$

176,255

 

 

$

39,448

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.32

 

 

$

0.40

 

 

$

0.37

 

 

$

0.42

 

 

$

1.50

 

 

$

0.33

 

Diluted

 

$

0.31

 

 

$

0.39

 

 

$

0.36

 

 

$

0.42

 

 

$

1.50

 

 

$

0.33

 

Shares used in non-GAAP per share calculations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

116,316

 

 

 

117,125

 

 

 

117,412

 

 

 

117,697

 

 

 

117,142

 

 

 

118,031

 

Diluted

 

 

117,249

 

 

 

119,454

 

 

 

120,438

 

 

 

117,697

 

 

 

117,142

 

 

 

118,031

 

(1) See the following table for a reconciliation of this non-GAAP measure.

 

Unaudited Reconciliation of GAAP Net (Loss) Income Attributable to Redeemable Noncontrolling Interest to Non-GAAP Net (Loss) Income Attributable to Redeemable Noncontrolling Interest
(in thousands)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Year Ended

 

 

Three Months Ended

 

 

 

March 31,

 

 

June 30,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2022

 

Net (loss) income attributable to redeemable noncontrolling interest

 

$

(2,810

)

 

$

(656

)

 

$

68

 

 

$

4,527

 

 

$

1,129

 

 

$

(1,072

)

Stock-based compensation expense(1)

 

 

474

 

 

 

2,716

 

 

 

413

 

 

 

4,807

 

 

 

8,410

 

 

 

5,371

 

Amortization of intangible assets(1)

 

 

2,311

 

 

 

2,774

 

 

 

2,778

 

 

 

2,769

 

 

 

10,632

 

 

 

2,774

 

Non-GAAP net (loss) income attributable to redeemable noncontrolling interest

 

$

(25

)

 

$

4,834

 

 

$

3,259

 

 

$

12,103

 

 

$

20,171

 

 

$

7,073

 

(1) These exclusions are adjusted for redeemable noncontrolling interest.

 

 

 


Third Quarter 2022 Guidance

CarGurus anticipates total revenue, non-GAAP Consolidated Adjusted EBITDA, and non-GAAP earnings per share to be in the following ranges for the third quarter 2022:
 

Total revenue

$460 million to $490 million

Non-GAAP Consolidated Adjusted EBITDA

$44.5 million to $52.5 million

Non-GAAP EPS

$0.25 to $0.28

 

The third quarter 2022 non-GAAP earnings per share calculation assumes 119.5 million diluted weighted-average common shares outstanding. This assumed number of shares outstanding excludes the potential dilution from CarGurus utilizing its equity as the sole form of consideration to purchase the remaining 49% interest in CarOffer, which is assumed for accounting purposes. As of June 30, 2022, there were $15.4 million potentially dilutive shares related to the potential future purchase of the remaining 49% interest in CarOffer, all of which have been excluded from the calculation of the third quarter 2022 non-GAAP earnings per share calculation as they were anti-dilutive as of such date.

 

The assumptions that are built into guidance for the third quarter 2022 regarding our pace of paid dealer acquisition, churn, and expansion activity for the relevant period are based on recent market behaviors and industry conditions. Guidance for the third quarter 2022 excludes the effects of significant COVID-19 resurgences, including the reintroduction of lockdowns and/or a slowed pace of recovery, or other macro-level industry issues that result in dealers and consumers materially changing their recent market behaviors or that cause us to enact measures to assist dealers, such as offering fee reductions or waivers as we have done from time to time during the COVID-19 pandemic. Guidance also excludes adjustments to the carrying value of redeemable noncontrolling interests resulting from potential changes in the redemption value of such interests, and any potential impact of foreign currency exchange gains or losses.

 

CarGurus has not reconciled its guidance of non-GAAP consolidated adjusted EBITDA to GAAP consolidated net income or non-GAAP consolidated EPS to GAAP consolidated EPS because the reconciling items between such GAAP and non-GAAP financial measures, which includes, as applicable, stock-based compensation, amortization of intangible assets, acquisition-related expenses, depreciation expenses, non-intangible amortization, other income (net), the provision for income taxes, income tax effects, and adjustments to the carrying value of redeemable noncontrolling interests resulting from changes in the redemption value of such interests, cannot be reasonably predicted due to, as applicable, the timing, amount, valuation and number of future employee equity awards, and the uncertainty relating to the timing, frequency and effect of acquisitions and the significance of the resulting acquisition-related expenses, including adjustments to the carrying value of redeemable noncontrolling interests resulting from potential changes in the redemption value of such interests, and therefore cannot be determined without unreasonable effort. For more information regarding the non-GAAP financial measures discussed in this release, please see the reconciliations of GAAP financial measures to non-GAAP financial measures and the section titled “Non-GAAP Financial Measures and Other Business Metrics” below.

 

Conference Call and Webcast Information

CarGurus will host a conference call and live webcast to discuss its second quarter ended 2022 financial results and business outlook at 5:00 p.m. Eastern Time today, August 8, 2022. To access the conference call, dial (877) 451-6152 for callers in the U.S. or Canada, or (201) 389-0879 for international callers. The webcast will be available live on the Investors section of CarGurus’ website at https://investors.cargurus.com.

 


An audio replay of the call will also be available to investors beginning at approximately 8:00 p.m. Eastern Time today, August 8, 2022, until 11:59 p.m. Eastern Time on August 22, 2022, by dialing (844) 512-2921 for callers in the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 13730552. In addition, an archived webcast will be available on the Investors section of CarGurus’ website at https://investors.cargurus.com.

About CarGurus

CarGurus (Nasdaq: CARG) is a multinational, online automotive platform for buying and selling vehicles that is building upon its industry-leading listings marketplace with both digital retail solutions and the CarOffer online wholesale platform. The CarGurus marketplace gives consumers the confidence to purchase or sell a vehicle either online or in-person, and it gives dealerships the power to accurately price, effectively market, instantly acquire and quickly sell vehicles, all with a nationwide reach. The company uses proprietary technology, search algorithms and data analytics to bring trust, transparency, and competitive pricing to the automotive shopping experience. CarGurus is the most visited automotive shopping site in the U.S. (source: Comscore Media Metrix® Multi-Platform, Automotive – Information/Resources, Total Visits, Q2 2022, U.S.).

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

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

CarGurus® is a registered trademark of CarGurus, Inc., and CarOffer® is a registered trademark of CarOffer, LLC. All other product names, trademarks and registered trademarks are property of their respective owners.
© 2022 CarGurus, Inc., All Rights Reserved.

Cautionary Language Concerning Forward-Looking Statements
This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding: our future financial and business performance for the third quarter 2022; our belief that the presentation of non-GAAP financial measures and other business metrics is helpful to our investors; our business and growth strategies, including plans to create the only platform where dealers can source, market, and sell and consumers can shop, finance, buy and sell; and the impact of the COVID-19 pandemic and other macro-level issues on our industry, business and financial results, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “guide,” “intend,” “likely,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to: our growth and ability to grow our revenue; our relationships with dealers; competition in the markets in which we operate; market growth; our ability to innovate; our ability to realize benefits from our acquisitions and successfully implement the integration strategies in connection therewith; natural disasters, epidemics or pandemics, like COVID-19 that has negatively impacted our business; global supply chain challenges, the semiconductor chip shortage and other macroeconomic issues; the material weakness identified in our internal controls over financial reporting; changes in our key personnel; our ability to operate in compliance with applicable laws, as well as other risks and uncertainties as may be detailed from time to time in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other reports we file with the Securities and Exchange Commission. Moreover, we operate in very competitive and rapidly changing environments. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee that future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

 


Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

At
June 30,
2022

 

 

At
December 31,
2021

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

338,238

 

 

$

231,944

 

Investments

 

 

30,000

 

 

 

90,000

 

Accounts receivable, net of allowance for doubtful accounts of $1,084
   and $420, respectively

 

 

193,431

 

 

 

189,324

 

Inventory

 

 

21,684

 

 

 

19,656

 

Prepaid expenses, prepaid income taxes and other current assets

 

 

24,599

 

 

 

16,430

 

Deferred contract costs

 

 

8,271

 

 

 

9,045

 

Restricted cash

 

 

13,291

 

 

 

6,709

 

Total current assets

 

 

629,514

 

 

 

563,108

 

Property and equipment, net

 

 

35,343

 

 

 

32,210

 

Intangible assets, net

 

 

68,338

 

 

 

83,915

 

Goodwill

 

 

157,073

 

 

 

158,287

 

Operating lease right-of-use assets

 

 

59,226

 

 

 

60,609

 

Restricted cash

 

 

9,627

 

 

 

9,627

 

Deferred tax assets

 

 

36,816

 

 

 

13,378

 

Deferred contract costs, net of current portion

 

 

6,631

 

 

 

5,867

 

Other non-current assets

 

 

7,138

 

 

 

4,573

 

Total assets

 

$

1,009,706

 

 

$

931,574

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

74,171

 

 

$

66,153

 

Accrued expenses, accrued income taxes and other current liabilities

 

 

74,391

 

 

 

78,586

 

Deferred revenue

 

 

15,071

 

 

 

12,784

 

Operating lease liabilities

 

 

12,340

 

 

 

13,186

 

Total current liabilities

 

 

175,973

 

 

 

170,709

 

Operating lease liabilities

 

 

56,110

 

 

 

57,519

 

Deferred tax liabilities

 

 

32

 

 

 

58

 

Other non–current liabilities

 

 

51,251

 

 

 

23,639

 

Total liabilities

 

 

283,366

 

 

 

251,925

 

Redeemable noncontrolling interest

 

 

264,505

 

 

 

162,808

 

Stockholders’ equity:

 

 

 

 

 

 

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

 

 

 

 

 

 

Class A common stock, $0.001 par value per share; 500,000,000 shares
   authorized; 102,465,807 and 101,773,034 shares issued and outstanding
   at June 30, 2022 and December 31, 2021, respectively

 

 

102

 

 

 

102

 

Class B common stock, $0.001 par value per share; 100,000,000 shares
   authorized; 15,999,173 and 15,999,173 shares issued and outstanding
   at June 30, 2022 and December 31, 2021, respectively

 

 

16

 

 

 

16

 

Additional paid-in capital

 

 

407,363

 

 

 

387,868

 

Retained earnings

 

 

56,832

 

 

 

129,258

 

Accumulated other comprehensive loss

 

 

(2,478

)

 

 

(403

)

Total stockholders’ equity

 

 

461,835

 

 

 

516,841

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

 

$

1,009,706

 

 

$

931,574

 

 

 

 

 

 


Unaudited Condensed Consolidated Income Statements

(in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

$

163,926

 

 

$

160,458

 

 

$

327,215

 

 

$

316,259

 

Wholesale

 

 

75,937

 

 

 

53,514

 

 

 

166,931

 

 

 

67,317

 

Product

 

 

271,366

 

 

 

3,776

 

 

 

447,691

 

 

 

5,540

 

Total revenue

 

 

511,229

 

 

 

217,748

 

 

 

941,837

 

 

 

389,116

 

Cost of revenue (1)

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

 

13,257

 

 

 

11,311

 

 

 

25,466

 

 

 

22,299

 

Wholesale

 

 

46,518

 

 

 

35,226

 

 

 

104,700

 

 

 

46,352

 

Product

 

 

263,603

 

 

 

3,780

 

 

 

441,945

 

 

 

5,724

 

Total cost of revenue

 

 

323,378

 

 

 

50,317

 

 

 

572,111

 

 

 

74,375

 

Gross profit

 

 

187,851

 

 

 

167,431

 

 

 

369,726

 

 

 

314,741

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

95,605

 

 

 

66,135

 

 

 

183,186

 

 

 

134,309

 

Product, technology, and development

 

 

31,354

 

 

 

27,630

 

 

 

62,007

 

 

 

52,794

 

General and administrative

 

 

33,514

 

 

 

26,167

 

 

 

66,635

 

 

 

46,681

 

Depreciation and amortization

 

 

3,836

 

 

 

9,022

 

 

 

7,697

 

 

 

16,689

 

Total operating expenses

 

 

164,309

 

 

 

128,954

 

 

 

319,525

 

 

 

250,473

 

Income from operations

 

 

23,542

 

 

 

38,477

 

 

 

50,201

 

 

 

64,268

 

Other (expense) income, net

 

 

(156

)

 

 

61

 

 

 

(275

)

 

 

283

 

Income before income taxes

 

 

23,386

 

 

 

38,538

 

 

 

49,926

 

 

 

64,551

 

Provision for income taxes

 

 

5,325

 

 

 

11,142

 

 

 

13,027

 

 

 

17,604

 

Consolidated net income

 

 

18,061

 

 

 

27,396

 

 

 

36,899

 

 

 

46,947

 

Net loss attributable to redeemable noncontrolling interest

 

 

(1,223

)

 

 

(656

)

 

 

(2,295

)

 

 

(3,466

)

Net income attributable to CarGurus, Inc.

 

 

19,284

 

 

 

28,052

 

 

 

39,194

 

 

 

50,413

 

Accretion of redeemable noncontrolling interest to redemption value

 

 

29,620

 

 

 

 

 

 

111,620

 

 

 

 

Net (loss) income attributable to common stockholders

 

$

(10,336

)

 

$

28,052

 

 

$

(72,426

)

 

$

50,413

 

Basic

 

$

(0.09

)

 

$

0.24

 

 

$

(0.61

)

 

$

0.43

 

Diluted

 

$

(0.09

)

 

$

0.23

 

 

$

(0.61

)

 

$

0.42

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

118,390,641

 

 

 

117,124,895

 

 

 

118,211,975

 

 

 

116,722,913

 

Diluted

 

 

118,390,641

 

 

 

119,454,104

 

 

 

118,211,975

 

 

 

118,353,969

 

(1) Includes depreciation and amortization expense for the three months ended June 30, 2022 and 2021 and for the six months ended June 30, 2022 and 2021 of $7,398, $1,143, $14,722, and $2,142, respectively.

 

 

 


Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

18,061

 

 

$

27,396

 

 

$

36,899

 

 

$

46,947

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,234

 

 

 

10,165

 

 

 

22,419

 

 

 

18,831

 

Currency loss (gain) on foreign denominated transactions

 

 

270

 

 

 

21

 

 

 

354

 

 

 

(30

)

Deferred taxes

 

 

(10,373

)

 

 

2,276

 

 

 

(23,464

)

 

 

2,336

 

Provision for doubtful accounts

 

 

549

 

 

 

71

 

 

 

699

 

 

 

450

 

Stock-based compensation expense

 

 

13,432

 

 

 

14,387

 

 

 

27,579

 

 

 

28,747

 

Amortization of deferred contract costs

 

 

2,758

 

 

 

3,259

 

 

 

5,564

 

 

 

6,454

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(51,995

)

 

 

(45,559

)

 

 

(12,022

)

 

 

(47,982

)

Inventory

 

 

(692

)

 

 

(1,968

)

 

 

(2,028

)

 

 

(2,533

)

Prepaid expenses, prepaid income taxes, and other assets

 

 

(8,307

)

 

 

167

 

 

 

(10,434

)

 

 

(1,485

)

Deferred contract costs

 

 

(2,749

)

 

 

(1,604

)

 

 

(5,746

)

 

 

(5,098

)

Accounts payable

 

 

12,230

 

 

 

10,457

 

 

 

8,168

 

 

 

15,333

 

Accrued expenses, accrued income taxes, and other liabilities

 

 

8,087

 

 

 

17,212

 

 

 

38,174

 

 

 

15,580

 

Deferred revenue

 

 

2,307

 

 

 

1,132

 

 

 

2,302

 

 

 

3,989

 

Lease obligations

 

 

(277

)

 

 

61

 

 

 

(869

)

 

 

(204

)

Net cash (used in) provided by operating activities

 

 

(5,465

)

 

 

37,473

 

 

 

87,595

 

 

 

81,335

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,431

)

 

 

(3,445

)

 

 

(2,661

)

 

 

(4,672

)

Capitalization of website development costs

 

 

(2,996

)

 

 

(1,143

)

 

 

(5,502

)

 

 

(2,109

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

1,626

 

 

 

 

 

 

(64,273

)

Investments in certificates of deposit

 

 

 

 

 

(45,000

)

 

 

 

 

 

(45,000

)

Maturities of certificates of deposit

 

 

30,000

 

 

 

60,000

 

 

 

60,000

 

 

 

60,000

 

Net cash provided by (used in) investing activities

 

 

25,573

 

 

 

12,038

 

 

 

51,837

 

 

 

(56,054

)

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

25

 

 

 

140

 

 

 

705

 

 

 

398

 

Payment of finance lease obligations

 

 

(16

)

 

 

(3

)

 

 

(35

)

 

 

(13

)

Payment of withholding taxes on net share settlement of equity awards

 

 

(5,830

)

 

 

(3,167

)

 

 

(11,260

)

 

 

(8,208

)

Repayment of line of credit

 

 

 

 

 

 

 

 

 

 

 

(14,250

)

Payment of tax distributions to redeemable noncontrolling interest holders

 

 

(4,172

)

 

 

 

 

 

(12,691

)

 

 

 

Payments received in advance from (made to) third party payment processor

 

 

21,243

 

 

 

 

 

 

(2,363

)

 

 

 

Net cash provided by (used in) financing activities

 

 

11,250

 

 

 

(3,030

)

 

 

(25,644

)

 

 

(22,073

)

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

 

 

(700

)

 

 

(16

)

 

 

(912

)

 

 

(135

)

Net increase in cash, cash equivalents, and restricted cash

 

 

30,658

 

 

 

46,465

 

 

 

112,876

 

 

 

3,073

 

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

 

 

330,498

 

 

 

157,534

 

 

 

248,280

 

 

 

200,926

 

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

 

$

361,156

 

 

$

203,999

 

 

$

361,156

 

 

$

203,999

 

 

 

 


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

(in thousands, except percentages)
 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022