8-K
false000149425900014942592022-11-082022-11-08

 

 

 

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): November 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 November 8, 2022, CarGurus, Inc. (the “Company”) announced its financial results for the quarter ended September 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 November 8, 2022, reporting its financial results for the quarter ended September 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: November 8, 2022

 

By:

/s/ Jason Trevisan

 

 

 

Name: Jason Trevisan

 

 

 

Title: Chief Executive Officer

 

 


EX-99.1

 

Exhibit 99.1

https://cdn.kscope.io/a4b787f0b3f9ab6240e866785b1e5766-img239243378_0.jpg 

 

CarGurus Announces Third Quarter 2022 Results

Third Quarter Highlights:

Total revenue of $426.5 million, an increase of 91% year-over-year
GAAP operating income of $28.7 million; non-GAAP operating income of $29.4 million
GAAP consolidated net income of $18.8 million; non-GAAP consolidated net income of $20.8 million
GAAP net income attributable to common stockholders of $107.0 million; non-GAAP net income attributable to common stockholders of $27.3 million
Cash and cash equivalents of $404.4 million and an available $400 million under its revolving credit facility
Consolidated Adjusted EBITDA of $32.9 million; Adjusted EBITDA of $38.8 million

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

“This year has been a pivotal time in the evolution of our company, as we have been transforming from a Listings business to a transaction-enabled platform at a swift pace, which has enabled us to provide for our dealer partners and consumer audience a portfolio of offerings for every stage of the automotive purchasing and selling life-cycle. While we are still early in the journey of fully integrating Digital Retail and Digital Wholesale with our core Listings business, I am proud of the progress we have made this year as we put in place the building blocks for long-term success,” said Jason Trevisan, Chief Executive Officer of CarGurus. “Regarding our most recent quarter, while there were business areas that exceeded our expectations, our third quarter financial metrics fell short of the low end of our guidance range. The hurdles faced this quarter represent an opportunity to move quickly to make the transformations necessary to achieve these long-term goals, and while that will require some time and focus to realize, I believe our team can accomplish all that we have set out to achieve and that our portfolio strategy is the right one.”
 

Revenue

Total revenue was $426.5 million, an increase of 91% compared to $222.9 million in the third quarter of 2021.

Marketplace revenue was $165.3 million, an increase of 3% compared to $159.9 million in the third quarter of 2021.

Wholesale revenue was $47.0 million, an increase of 4% compared to $45.2 million in the third quarter of 2021.

Product revenue was $214.1 million, an increase of 1,105% compared to $17.8 million in the third quarter of 2021.

Operating Income

GAAP operating income was $28.7 million, a decrease of (28%) compared to $40.1 million in the third quarter of 2021.

 


Non-GAAP operating income was $29.4 million, a decrease of (53%) compared to $63.1 million in the third quarter of 2021.

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

GAAP consolidated net income was $18.8 million compared to $29.3 million in the third quarter of 2021.

Non-GAAP consolidated net income was $20.8 million compared to $46.2 million in the third quarter of 2021.

GAAP net income attributable to common stockholders was $107.0 million compared to $29.2 million in the third quarter of 2021. Net income attributable to common stockholders per diluted share was $0.14 compared to $0.24 per fully diluted share, in the third quarter of 2021.

Non-GAAP net income attributable to common stockholders was $27.3 million, or $0.21 per fully diluted share, compared to $42.9 million, or $0.36 per fully diluted share, in the third quarter of 2021.

Consolidated Adjusted EBITDA, a non-GAAP metric, was $32.9 million compared to $68.3 million in the third quarter of 2021.

Adjusted EBITDA, a non-GAAP metric, was $38.8 million compared to $64.9 million in the third quarter of 2021.

Balance Sheet and Cash Flow

As of September 30, 2022, CarGurus had cash and cash equivalents of $404.4 million and an available $400 million under its revolving credit facility.

CarGurus generated $73.2 million in cash from operations and $68.9 million in free cash flow, a non-GAAP metric, during the third quarter of 2022, compared to having generated $53.7 million in cash from operations and $51.4 million in free cash flow during the third quarter of 2021.

Third Quarter Business Metrics(1)

Total paying dealers were 31,286 at September 30, 2022, an increase of 2% compared to 30,754 at September 30, 2021. Of the total paying dealers at September 30, 2022, U.S. and International accounted for 24,691 and 6,595, respectively, compared to 23,979 and 6,775, respectively, at September 30, 2021.

Quarterly Average Revenue per Subscribing Dealer (“QARSD”) in the U.S. was $5,800 as of September 30, 2022, an increase of 4% compared to $5,602 as of September 30, 2021.

QARSD in International markets was $1,507 as of September 30, 2022, a decrease of (1%) compared to $1,524 as of September 30, 2021.

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

o
U.S. average monthly unique users were 29.4 million, an increase of 2% compared to 28.8 million in the third quarter of 2021.
o
U.S. average monthly sessions were 75.9 million, an increase of 7% compared to 71.2 million in the third quarter of 2021.
o
International average monthly unique users were 6.7 million, a decrease of (10%) compared to 7.5 million in the third quarter of 2021.
o
International average monthly sessions were 15.2 million, a decrease of (11%) compared to 17.1 million in the third quarter of 2021.

 

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

 


Fourth Quarter and Full-Year 2022 Guidance

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

Fourth Quarter 2022:
 

Total Revenue

$270 million to $300 million

Instant Max Cash Offer Revenue

$65 million to $85 million

Non-GAAP Consolidated Adjusted EBITDA

$6 million to $14 million

Non-GAAP EPS

$0.13 to $0.16

Full-Year 2022:
 

Total Revenue

$1,638 million to $1,668 million

Instant Max Cash Offer Revenue

$667 million to $687 million

Non-GAAP Consolidated Adjusted EBITDA

$166 million to $174 million

Non-GAAP EPS

$1.02 to $1.05

 

The fourth quarter and full-year 2022 non-GAAP earnings per share calculation assumes 119.5 million diluted weighted-average common shares outstanding. This estimated 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.

 

The assumptions that are built into guidance for the fourth quarter and full-year 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 fourth quarter and full-year 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 include, as applicable, stock-based compensation, amortization of intangible assets, impairment of long-lived 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 third quarter ended 2022 financial results and business outlook at 5:00 p.m. Eastern Time today, November 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, November 8, 2022, until 11:59 p.m. Eastern Time on November 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 13732645. 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: SimilarWeb: Overview Report (Traffic Insights), Q3 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 fourth quarter and full-year 2022; our belief that the presentation of non-GAAP financial measures and other business metrics is helpful to our investors; our ability to move quickly to make transformations necessary for our business to achieve long-term goals; and the impact of 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, increased inflation and interest rates, 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
September 30,
2022

 

 

At
December 31,
2021

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

404,429

 

 

$

231,944

 

Investments

 

 

 

 

 

90,000

 

Accounts receivable, net of allowance for doubtful accounts of $1,122
   and $420, respectively

 

 

120,059

 

 

 

189,324

 

Inventory

 

 

28,166

 

 

 

19,656

 

Prepaid expenses, prepaid income taxes and other current assets

 

 

29,647

 

 

 

16,430

 

Deferred contract costs

 

 

8,039

 

 

 

9,045

 

Restricted cash

 

 

13,506

 

 

 

6,709

 

Total current assets

 

 

603,846

 

 

 

563,108

 

Property and equipment, net

 

 

36,833

 

 

 

32,210

 

Intangible assets, net

 

 

60,535

 

 

 

83,915

 

Goodwill

 

 

156,216

 

 

 

158,287

 

Operating lease right-of-use assets

 

 

55,793

 

 

 

60,609

 

Restricted cash

 

 

9,376

 

 

 

9,627

 

Deferred tax assets

 

 

44,008

 

 

 

13,378

 

Deferred contract costs, net of current portion

 

 

7,298

 

 

 

5,867

 

Other non-current assets

 

 

8,950

 

 

 

4,573

 

Total assets

 

$

982,855

 

 

$

931,574

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

67,149

 

 

$

66,153

 

Accrued expenses, accrued income taxes and other current liabilities

 

 

56,970

 

 

 

78,586

 

Deferred revenue

 

 

12,737

 

 

 

12,784

 

Operating lease liabilities

 

 

12,025

 

 

 

13,186

 

Total current liabilities

 

 

148,881

 

 

 

170,709

 

Operating lease liabilities

 

 

52,942

 

 

 

57,519

 

Deferred tax liabilities

 

 

23

 

 

 

58

 

Other non–current liabilities

 

 

30,466

 

 

 

23,639

 

Total liabilities

 

 

232,312

 

 

 

251,925

 

Redeemable noncontrolling interest

 

 

172,612

 

 

 

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; 102,903,347 and 101,773,034 shares issued and outstanding
   at September 30, 2022 and December 31, 2021, respectively

 

 

103

 

 

 

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 September 30, 2022 and December 31, 2021, respectively

 

 

16

 

 

 

16

 

Additional paid-in capital

 

 

418,013

 

 

 

387,868

 

Retained earnings

 

 

163,796

 

 

 

129,258

 

Accumulated other comprehensive loss

 

 

(3,997

)

 

 

(403

)

Total stockholders’ equity

 

 

577,931

 

 

 

516,841

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

 

$

982,855

 

 

$

931,574

 

 

 

 

 

 


Unaudited Condensed Consolidated Income Statements

(in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

$

165,309

 

 

$

159,925

 

 

$

492,524

 

 

$

476,183

 

Wholesale

 

 

47,045

 

 

 

45,215

 

 

 

213,976

 

 

 

112,532

 

Product

 

 

214,100

 

 

 

17,775

 

 

 

661,791

 

 

 

23,316

 

Total revenue

 

 

426,454

 

 

 

222,915

 

 

 

1,368,291

 

 

 

612,031

 

Cost of revenue (1)

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

 

14,956

 

 

 

11,687

 

 

 

40,422

 

 

 

33,986

 

Wholesale

 

 

41,789

 

 

 

28,992

 

 

 

146,489

 

 

 

75,344

 

Product

 

 

218,924

 

 

 

19,354

 

 

 

660,869

 

 

 

25,078

 

Total cost of revenue

 

 

275,669

 

 

 

60,033

 

 

 

847,780

 

 

 

134,408

 

Gross profit

 

 

150,785

 

 

 

162,882

 

 

 

520,511

 

 

 

477,623

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

83,319

 

 

 

66,626

 

 

 

266,505

 

 

 

200,935

 

Product, technology, and development

 

 

30,208

 

 

 

26,539

 

 

 

92,215

 

 

 

79,333

 

General and administrative

 

 

4,760

 

 

 

20,414

 

 

 

71,395

 

 

 

67,095

 

Depreciation and amortization

 

 

3,842

 

 

 

9,227

 

 

 

11,539

 

 

 

25,916

 

Total operating expenses

 

 

122,129

 

 

 

122,806

 

 

 

441,654

 

 

 

373,279

 

Income from operations

 

 

28,656

 

 

 

40,076

 

 

 

78,857

 

 

 

104,344

 

Other income (expense), net

 

 

200

 

 

 

143

 

 

 

(75

)

 

 

426

 

Income before income taxes

 

 

28,856

 

 

 

40,219

 

 

 

78,782

 

 

 

104,770

 

Provision for income taxes

 

 

10,032

 

 

 

10,952

 

 

 

23,059

 

 

 

28,556

 

Consolidated net income

 

 

18,824

 

 

 

29,267

 

 

 

55,723

 

 

 

76,214

 

Net (loss) income attributable to redeemable noncontrolling interest

 

 

(1,576

)

 

 

68

 

 

 

(3,871

)

 

 

(3,398

)

Net income attributable to CarGurus, Inc.

 

 

20,400

 

 

 

29,199

 

 

 

59,594

 

 

 

79,612

 

Accretion of redeemable noncontrolling interest to redemption value

 

 

(86,564

)

 

 

 

 

 

25,056

 

 

 

 

Net income attributable to common stockholders

 

$

106,964

 

 

$

29,199

 

 

$

34,538

 

 

$

79,612

 

Basic

 

$

0.90

 

 

$

0.25

 

 

$

0.29

 

 

$

0.68

 

Diluted

 

$

0.14

 

 

$

0.24

 

 

$

0.28

 

 

$

0.66

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

118,683,642

 

 

 

117,412,164

 

 

 

118,370,925

 

 

 

116,955,188

 

Diluted

 

 

132,243,636

 

 

 

120,438,373

 

 

 

122,159,270

 

 

 

119,051,228

 

(1) Includes depreciation and amortization expense for the three months ended September 30, 2022 and 2021 and for the nine months September 30, 2022 and 2021 of $7,341, $1,429, $22,063, and $3,571, respectively.

 

 

 


Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

18,824

 

 

$

29,267

 

 

$

55,723

 

 

$

76,214

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,183

 

 

 

10,656

 

 

 

33,602

 

 

 

29,487

 

Currency loss (gain) on foreign denominated transactions

 

 

263

 

 

 

(42

)

 

 

617

 

 

 

(72

)

Deferred taxes

 

 

(7,201

)

 

 

3,438

 

 

 

(30,665

)

 

 

5,774

 

Provision for doubtful accounts

 

 

430

 

 

 

277

 

 

 

1,129

 

 

 

727

 

Stock-based compensation expense

 

 

13,971

 

 

 

13,804

 

 

 

41,550

 

 

 

42,551

 

Amortization of deferred financing costs

 

 

7

 

 

 

 

 

 

7

 

 

 

 

Amortization of deferred contract costs

 

 

2,768

 

 

 

3,189

 

 

 

8,332

 

 

 

9,643

 

Impairment of website development costs

 

 

 

 

 

2,351

 

 

 

 

 

 

2,351

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

75,506

 

 

 

(3,613

)

 

 

63,484

 

 

 

(51,595

)

Inventory

 

 

(6,482

)

 

 

(1,524

)

 

 

(8,510

)

 

 

(4,057

)

Prepaid expenses, prepaid income taxes, and other assets

 

 

(4,241

)

 

 

(1,485

)

 

 

(14,675

)

 

 

(2,970

)

Deferred contract costs

 

 

(3,343

)

 

 

(1,424

)

 

 

(9,089

)

 

 

(6,522

)

Accounts payable

 

 

(6,858

)

 

 

9,215

 

 

 

1,310

 

 

 

24,548

 

Accrued expenses, accrued income taxes, and other liabilities

 

 

(19,250

)

 

 

(10,772

)

 

 

18,924

 

 

 

4,808

 

Deferred revenue

 

 

(2,322

)

 

 

(599

)

 

 

(20

)

 

 

3,390

 

Lease obligations

 

 

(47

)

 

 

990

 

 

 

(916

)

 

 

786

 

Net cash provided by operating activities

 

 

73,208

 

 

 

53,728

 

 

 

160,803

 

 

 

135,063

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,507

)

 

 

(263

)

 

 

(4,168

)

 

 

(4,935

)

Capitalization of website development costs

 

 

(2,773

)

 

 

(2,036

)

 

 

(8,275

)

 

 

(4,145

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

 

 

 

 

 

 

(64,273

)

Investments in certificates of deposit

 

 

 

 

 

(45,000

)

 

 

 

 

 

(90,000

)

Maturities of certificates of deposit

 

 

30,000

 

 

 

40,000

 

 

 

90,000

 

 

 

100,000

 

Net cash provided by (used in) investing activities

 

 

25,720

 

 

 

(7,299

)

 

 

77,557

 

 

 

(63,353

)

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

14

 

 

 

139

 

 

 

719

 

 

 

537

 

Payment of finance lease obligations

 

 

(16

)

 

 

(16

)

 

 

(51

)

 

 

(29

)

Payment of withholding taxes on net share settlement of equity awards

 

 

(2,911

)

 

 

(3,106

)

 

 

(14,171

)

 

 

(11,314

)

Repayment of line of credit

 

 

 

 

 

 

 

 

 

 

 

(14,250

)

Payment of deferred financing costs

 

 

(2,578

)

 

 

 

 

 

(2,578

)

 

 

 

Payment of tax distributions to redeemable noncontrolling interest holders

 

 

(7,152

)

 

 

 

 

 

(19,843

)

 

 

 

Payments made to third-party payment processor

 

 

(19,402

)

 

 

 

 

 

(21,765

)

 

 

 

Net cash used in financing activities

 

 

(32,045

)

 

 

(2,983

)

 

 

(57,689

)

 

 

(25,056

)

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

 

 

(728

)

 

 

(224

)

 

 

(1,640

)

 

 

(359

)

Net increase in cash, cash equivalents, and restricted cash

 

 

66,155

 

 

 

43,222

 

 

 

179,031

 

 

 

46,295

 

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

 

 

361,156

 

 

 

203,999

 

 

 

248,280

 

 

 

200,926

 

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

 

$

427,311

 

 

$

247,221

 

 

$

427,311

 

 

$

247,221

 

 

 

 


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

(in thousands, except percentages)
 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP operating income

 

$

28,656

 

 

$

40,076

 

 

$

78,857

 

 

$

104,344

 

Stock-based compensation expense

 

 

(6,946

)

 

 

15,169

 

 

 

47,353

 

 

 

53,102

 

Amortization of intangible assets

 

 

7,669

 

 

 

7,854

 

 

 

23,046

 

 

 

22,358

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

 

 

 

709

 

Non-GAAP operating income

 

$

29,379

 

 

$

63,099

 

 

$

149,256

 

 

$

180,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

 

7

%

 

 

18

%

 

 

6

%

 

 

17

%

Non-GAAP operating margin

 

 

7

%

 

 

28

%

 

 

11

%

 

 

29

%

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

(in thousands, except per share data)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021(1)

 

 

2022

 

 

2021(1)

 

GAAP consolidated net income

 

$

18,824

 

 

$

29,267

 

 

$

55,723

 

 

$

76,214

 

Stock-based compensation expense

 

 

(6,946

)

 

 

15,169

 

 

 

47,353

 

 

 

53,102

 

Amortization of intangible assets

 

 

7,669

 

 

 

7,854

 

 

 

23,046

 

 

 

22,358

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

 

 

 

709

 

Income tax effects and adjustments

 

 

1,207

 

 

 

(6,135

)

 

 

(14,154

)

 

 

(17,728

)

Non-GAAP consolidated net income

 

 

20,754

 

 

 

46,155

 

 

 

111,968

 

 

 

134,655

 

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

 

 

6,570

 

 

 

(3,259

)

 

 

(7,182

)

 

 

(8,068

)

Non-GAAP net income attributable to common stockholders

 

$

27,324

 

 

$

42,896

 

 

$

104,786

 

 

$

126,587

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.23

 

 

$

0.37

 

 

$

0.89

 

 

$

1.08