8-K
false000149425900014942592023-08-092023-08-09

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): August 9, 2023

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 9, 2023, CarGurus, Inc. (the “Company”) announced its financial results for the quarter ended June 30, 2023. 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 press release attached as Exhibit 99.1 hereto is being furnished pursuant to Item 2.02 of this Current Report on Form 8-K 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 99.1 is furnished pursuant to Item 9.01(d).

 

Exhibit

No.

Description

99.1

Press Release of CarGurus, Inc. dated August 9, 2023.

104

 

Cover Page Interactive Data File (embedded within 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 9, 2023

By:

/s/ Jason Trevisan

Name: Jason Trevisan

Title: Chief Executive Officer

 

 


EX-99.1

 

Exhibit 99.1

https://cdn.kscope.io/6cb2a4bcf0b2fd30a35cfadad37f9554-img239243378_0.jpg 

 

CarGurus Announces Second Quarter 2023 Results

GAAP consolidated net income was $13.8 million; Consolidated Adjusted EBITDA was $45.2 million, exceeding high-end of guidance range

Digital Wholesale demonstrated ongoing efficiency in operating metrics

Digital Deal adoption reaches 2,900 dealers with over 250,000 digitally-enabled listings

Marketplace growth expected to accelerate for remainder of 2023

CAMBRIDGE, Mass., August 9, 2023 — 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, 2023.

"We are extremely pleased with our second quarter results as we exceeded our forecasted consolidated adjusted EBITDA guidance for the quarter," said Jason Trevisan, Chief Executive Officer at CarGurus. "The strength of our results came from growth in our Marketplace business which was fueled by product adoption and enhanced monetization strategies targeting both new and existing dealers. Concurrently, we took measures to improve our Digital Wholesale operations to ensure the long-term viability of the advancements made in the first half of this year. We are pleased that our diligent efforts led to segment profitability and higher operating efficiency this quarter. Our progress this quarter underscores our ability to respond to dynamic conditions internally and externally, all while remaining steadfast in building an online platform that supports both consumer and dealer customers at every stage of the buying and selling journey."

Second Quarter Financial Highlights

Total revenue of $239.7 million, a decrease of (53)% year-over-year.
Marketplace revenue was $171.0 million, an increase of 4% year-over-year.
Wholesale revenue was $32.0 million, a decrease of (58)% year-over-year.
Product revenue was $36.8 million, a decrease of (86)% year-over-year.
GAAP consolidated net income of $13.8 million, a decrease of (23)% year-over-year; non-GAAP consolidated net income of $33.8 million, a decrease of (24)% year-over-year.
GAAP net income attributable to common stockholders of $16.4 million, or $0.12 per fully diluted share, an increase of 259% year-over-year; non-GAAP net income attributable to common stockholders of $33.0 million, or $0.29 per fully diluted share, a decrease of (13)% year-over-year.
Consolidated Adjusted EBITDA, a non-GAAP metric, of $45.2 million, a decrease of (26)% year-over-year.
Adjusted EBITDA, a non-GAAP metric, of $43.7 million, a decrease of (19)% year-over-year.
Cash, cash equivalents, and short-term investments of $453.6 million and an available $399.3 million under its revolving credit facility.

 


 

Second Quarter Business Metrics(1)(2)(3)

U.S. Marketplace segment revenue was $158.4 million, an increase of 4% year-over-year. U.S. Marketplace segment operating income was $24.6 million, a decrease of (13)% year-over-year.
Digital Wholesale segment revenue was $68.8 million, a decrease of (80)% year-over-year. Digital Wholesale segment operating loss was $(6.3) million, an increase of 139% year-over-year.
Total paying dealers were 31,097 as of June 30, 2023, roughly flat year-over-year. Of the total paying dealers as of June 30, 2023, U.S. and International accounted for 24,220 and 6,877, respectively, a decrease of (1)% and an increase of 3%, respectively, year-over-year.
Quarterly Average Revenue per Subscribing Dealer (“QARSD”) in the U.S. was $6,110 as of June 30, 2023, an increase of 6% year-over-year. QARSD in International markets was $1,610 as of June 30, 2023, an increase of 5% year-over-year.
Website traffic and consumer engagement metrics for the second quarter of 2023 were as follows:
U.S. average monthly unique users were 31.9 million, an increase of 8% year-over-year.
U.S. average monthly sessions were 84.4 million, an increase of 5% year-over-year.
International average monthly unique users were 7.4 million, an increase of 12% year-over-year.
International average monthly sessions were 17.1 million, an increase of 15% year-over-year.
Transactions were 20,793, a decrease of (68)% year-over-year.
(1)
CarOffer website is excluded from the metrics presented for users and sessions.
(2)
Effective as of the fourth quarter of 2022 the Company revised its segment reporting from one reportable segment to two reportable segments, U.S. Marketplace and Digital Wholesale. The change in segment reporting was a triggering event for an evaluation of goodwill impairment. As such, the Company evaluated for goodwill impairment on December 31, 2022, and did not identify any impairment to its goodwill. The change in segment reporting was made to align with financial reporting results regularly provided to the Company's chief operating decision maker ("CODM") to assess the business. The CODM reviews segment revenue and segment income (loss) from operations as a proxy for the performance of the Company’s operations. The U.S. Marketplace segment derives revenues from marketplace services from customers within the United States. The Digital Wholesale segment derives revenues from Dealer-to-Dealer and Instant Max Cash Offer services and products which are sold on the CarOffer platform. The Company also has two operating segments which are individually immaterial and therefore aggregated into the Other category to reconcile reportable segments to the Unaudited Condensed Consolidated Income Statements. The Other category derives revenues from marketplace services from customers outside of the United States.
(3)
For the year ended December 31, 2022, Digital Wholesale segment income (loss) from operations did not reflect certain Dealer-to-Dealer and Instant Max Cash Offer ("IMCO") related capitalized website development amortization incurred by the U.S. Marketplace segment. During the three months ended March 31, 2023, the Company updated Digital Wholesale segment income (loss) from operations to reflect certain Dealer-to-Dealer and IMCO related capitalized website development amortization incurred by the U.S. Marketplace segment and accordingly updated Digital Wholesale segment income (loss) from operations for the three months ended June 30, 2022 for comparative purposes.

 


 

Third Quarter 2023 Guidance

CarGurus anticipates total revenue, product revenue, non-GAAP Consolidated Adjusted EBITDA, and non-GAAP earnings per share ("EPS") to be in the following ranges for the third quarter 2023:
 

Total revenue

$201 million to $221 million

Product revenue

$15 million to $25 million

Non-GAAP Consolidated Adjusted EBITDA

$36 million to $44 million

Non-GAAP EPS

$0.24 to $0.27

The third quarter 2023 non-GAAP EPS calculation assumes 114.5 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 third quarter 2023 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 2023 excludes 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. 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, depreciation expenses, non-intangible amortization, other (income) expense, 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 press 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 2023 financial results and business outlook at 5:00 p.m. Eastern Time today, August 9, 2023. To access the conference call, dial (844) 826-3035 for callers in the U.S. or Canada, or (412) 317-5195 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 9, 2023, until 11:59 p.m. Eastern Time on August 16, 2023, by dialing (844) 512-2921 for callers in the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 10181700. 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 digital wholesale platform. The CarGurus platform gives consumers the confidence to purchase and/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.1

1Source: SimilarWeb: Traffic Report, Q2 2023, 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.

© 2023 CarGurus, Inc., All Rights Reserved.

Cautionary Language Concerning Forward-Looking Statements

This press release includes forward-looking statements. Other than statements of historical facts, all statements contained in this press release, including, without limitation, statements regarding our future financial and business performance for the third quarter 2023; our ability to quickly 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 “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “guide,” “intend,” “may,” “might,” “plan,” “potential,” “predicts,” “projects,” “seeks,” “should,” “target,” “will,” “would,” 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. You should not place undue reliance on these statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including, without limitation, risks related to our growth and our 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; global supply chain challenges, 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; natural disasters, epidemics or pandemics; and 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 U.S. 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.


Investor Contact:

Kirndeep Singh

Vice President, Investor Relations

investors@cargurus.com

 

 

 


 

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

As of
June 30,
2023

 

 

As of
December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

363,060

 

 

$

469,517

 

Short-term investments

 

 

90,490

 

 

 

 

Accounts receivable, net of allowance for doubtful accounts of $807
   and $1,809, respectively

 

 

37,820

 

 

 

46,817

 

Inventory

 

 

541

 

 

 

5,282

 

Prepaid expenses, prepaid income taxes and other current assets

 

 

21,742

 

 

 

21,972

 

Deferred contract costs

 

 

10,078

 

 

 

8,541

 

Restricted cash

 

 

11,561

 

 

 

5,237

 

Total current assets

 

 

535,292

 

 

 

557,366

 

Property and equipment, net

 

 

48,243

 

 

 

40,128

 

Intangible assets, net

 

 

38,037

 

 

 

53,054

 

Goodwill

 

 

157,638

 

 

 

157,467

 

Operating lease right-of-use assets

 

 

189,905

 

 

 

56,869

 

Restricted cash

 

 

 

 

 

9,378

 

Deferred tax assets

 

 

51,888

 

 

 

35,488

 

Deferred contract costs, net of current portion

 

 

11,490

 

 

 

8,853

 

Other non-current assets

 

 

7,828

 

 

 

8,499

 

Total assets

 

$

1,040,321

 

 

$

927,102

 

Liabilities, redeemable noncontrolling interest and stockholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

39,260

 

 

$

32,529

 

Accrued expenses, accrued income taxes and other current liabilities

 

 

36,367

 

 

 

39,193

 

Deferred revenue

 

 

21,267

 

 

 

12,249

 

Operating lease liabilities

 

 

13,870

 

 

 

14,762

 

Total current liabilities

 

 

110,764

 

 

 

98,733

 

Operating lease liabilities

 

 

193,184

 

 

 

51,656

 

Deferred tax liabilities

 

 

43

 

 

 

54

 

Other non–current liabilities

 

 

5,611

 

 

 

5,301

 

Total liabilities

 

 

309,602

 

 

 

155,744

 

Redeemable noncontrolling interest

 

 

29,865

 

 

 

36,749

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value per share; 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; 97,426,273 and 101,636,649 shares issued and outstanding
   at June 30, 2023 and December 31, 2022, respectively

 

 

97

 

 

 

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, 2023 and December 31, 2022, respectively

 

 

16

 

 

 

16

 

Additional paid-in capital

 

 

346,494

 

 

 

413,092

 

Retained earnings

 

 

355,588

 

 

 

323,043

 

Accumulated other comprehensive loss

 

 

(1,341

)

 

 

(1,644

)

Total stockholders’ equity

 

 

700,854

 

 

 

734,609

 

Total liabilities, redeemable noncontrolling interest and stockholders’ equity

 

$

1,040,321

 

 

$

927,102

 

 

 


 

Unaudited Condensed Consolidated Income Statements

(in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

$

170,950

 

 

$

163,926

 

 

$

338,077

 

 

$

327,215

 

Wholesale

 

 

31,952

 

 

 

75,937

 

 

 

57,138

 

 

 

166,931

 

Product

 

 

36,835

 

 

 

271,366

 

 

 

76,485

 

 

 

447,691

 

Total revenue

 

 

239,737

 

 

 

511,229

 

 

 

471,700

 

 

 

941,837

 

Cost of revenue (1)

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

 

15,474

 

 

 

13,257

 

 

 

31,007

 

 

 

25,466

 

Wholesale

 

 

24,428

 

 

 

46,518

 

 

 

46,496

 

 

 

104,700

 

Product

 

 

35,694

 

 

 

263,603

 

 

 

75,076

 

 

 

441,945

 

Total cost of revenue

 

 

75,596

 

 

 

323,378

 

 

 

152,579

 

 

 

572,111

 

Gross profit

 

 

164,141

 

 

 

187,851

 

 

 

319,121

 

 

 

369,726

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

77,838

 

 

 

95,605

 

 

 

153,415

 

 

 

183,186

 

Product, technology, and development

 

 

37,391

 

 

 

31,354

 

 

 

73,998

 

 

 

62,007

 

General and administrative

 

 

27,267

 

 

 

33,514

 

 

 

52,186

 

 

 

66,635

 

Depreciation and amortization

 

 

3,907

 

 

 

3,836

 

 

 

7,725

 

 

 

7,697

 

Total operating expenses

 

 

146,403

 

 

 

164,309

 

 

 

287,324

 

 

 

319,525

 

Income from operations

 

 

17,738

 

 

 

23,542

 

 

 

31,797

 

 

 

50,201

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

4,333

 

 

 

311

 

 

 

8,076

 

 

 

348

 

Other income (expense), net

 

 

347

 

 

 

(467

)

 

 

942

 

 

 

(623

)

Total other income (expense), net

 

 

4,680

 

 

 

(156

)

 

 

9,018

 

 

 

(275

)

Income before income taxes

 

 

22,418

 

 

 

23,386

 

 

 

40,815

 

 

 

49,926

 

Provision for income taxes

 

 

8,601

 

 

 

5,325

 

 

 

15,132

 

 

 

13,027

 

Consolidated net income

 

 

13,817

 

 

 

18,061

 

 

 

25,683

 

 

 

36,899

 

Net loss attributable to redeemable noncontrolling interest

 

 

(2,596

)

 

 

(1,223

)

 

 

(6,862

)

 

 

(2,295

)

Net income attributable to CarGurus, Inc.

 

 

16,413

 

 

 

19,284

 

 

 

32,545

 

 

 

39,194

 

Accretion of redeemable noncontrolling interest to redemption value

 

 

 

 

 

29,620

 

 

 

 

 

 

111,620

 

Net income (loss) attributable to common stockholders

 

$

16,413

 

 

$

(10,336

)

 

$

32,545

 

 

$

(72,426

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.14

 

 

$

(0.09

)

 

$

0.28

 

 

$

(0.61

)

Diluted

 

$

0.12

 

 

$

(0.09

)

 

$

0.22

 

 

$

(0.61

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

113,438,057

 

 

 

118,390,641

 

 

 

114,392,961

 

 

 

118,211,975

 

Diluted

 

 

114,490,651

 

 

 

118,390,641

 

 

 

115,197,890

 

 

 

118,211,975

 

(1)
Includes depreciation and amortization expense for the three months ended June 30, 2023 and 2022 and for the six months ended June 30, 2023 and 2022 of $7,760, $7,398, $15,518, and $14,722, respectively.

 

 


 

Unaudited Segment Revenue

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Segment Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Marketplace

 

$

158,443

 

 

$

152,753

 

 

$

314,064

 

 

$

304,642

 

Digital Wholesale

 

 

68,787

 

 

 

347,303

 

 

 

133,623

 

 

 

614,622

 

Other

 

 

12,507

 

 

 

11,173

 

 

 

24,013

 

 

 

22,573

 

Total

 

$

239,737

 

 

$

511,229

 

 

$

471,700

 

 

$

941,837

 

 

Unaudited Segment Income (loss) from Operations

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Segment Income (Loss) from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Marketplace

 

$

24,619

 

 

$

28,346

 

 

$

51,158

 

 

$

58,182

 

Digital Wholesale

 

 

(6,307

)

 

 

(2,638

)

 

 

(17,532

)

 

 

(4,749

)

Other

 

 

(574

)

 

 

(2,166

)

 

 

(1,829

)

 

 

(3,232

)

Total

 

$

17,738

 

 

$

23,542

 

 

$

31,797

 

 

$

50,201

 

 

 


 

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

13,817

 

 

$

18,061

 

 

$

25,683

 

 

$

36,899

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,667

 

 

 

11,234

 

 

 

23,243

 

 

 

22,419

 

Gain on sale of property and equipment

 

 

 

 

 

 

 

 

(460

)

 

 

 

Currency loss (gain) on foreign denominated transactions

 

 

62

 

 

 

270

 

 

 

(136

)

 

 

354

 

Unrealized loss on short-term investments

 

 

21

 

 

 

 

 

 

21

 

 

 

 

Realized gain on short-term investments

 

 

(5

)

 

 

 

 

 

(5

)

 

 

 

Deferred taxes

 

 

(4,490

)

 

 

(10,373

)

 

 

(16,411

)

 

 

(23,464

)

Provision (recoveries) for doubtful accounts

 

 

129

 

 

 

549

 

 

 

(171

)

 

 

699

 

Stock-based compensation expense

 

 

14,603

 

 

 

13,432

 

 

 

29,507

 

 

 

27,579

 

Amortization of deferred financing costs

 

 

129

 

 

 

 

 

 

258

 

 

 

 

Amortization of deferred contract costs

 

 

2,866

 

 

 

2,758

 

 

 

5,603

 

 

 

5,564

 

Impairment of long-lived assets

 

 

9

 

 

 

 

 

 

184

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

6,383

 

 

 

(51,995

)

 

 

13,241

 

 

 

(12,022

)

Inventory

 

 

1,095

 

 

 

(692

)

 

 

4,740

 

 

 

(2,028

)

Prepaid expenses, prepaid income taxes, and other assets

 

 

(1,198

)

 

 

(8,307

)

 

 

3,454

 

 

 

(10,434

)

Deferred contract costs

 

 

(4,600

)

 

 

(2,749

)

 

 

(9,738

)

 

 

(5,746

)

Accounts payable

 

 

(6,128

)

 

 

12,230

 

 

 

4,140

 

 

 

8,168

 

Accrued expenses, accrued income taxes, and other liabilities

 

 

(8,633

)

 

 

8,087

 

 

 

(4,091

)

 

 

38,174

 

Deferred revenue

 

 

459

 

 

 

2,307

 

 

 

9,016

 

 

 

2,302

 

Lease obligations

 

 

3,150

 

 

 

(277

)

 

 

7,603

 

 

 

(869

)

Net cash provided by (used in) operating activities

 

 

29,336

 

 

 

(5,465

)

 

 

95,681

 

 

 

87,595

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,857

)

 

 

(1,431

)

 

 

(4,255

)

 

 

(2,661

)

Proceeds from sale of property and equipment

 

 

460

 

 

 

 

 

 

460

 

 

 

 

Capitalization of website development costs

 

 

(3,943

)

 

 

(2,996

)

 

 

(7,432

)

 

 

(5,502

)

Purchases of short-term investments

 

 

(95,506

)

 

 

 

 

 

(95,506

)

 

 

 

Maturities of short-term investments

 

 

 

 

 

30,000

 

 

 

 

 

 

60,000

 

Sales of short-term investments

 

 

5,000

 

 

 

 

 

 

5,000

 

 

 

 

Advance payments to customer, net of collections

 

 

(2,601

)

 

 

 

 

 

(2,601

)

 

 

 

Net cash (used in) provided by investing activities

 

 

(98,447

)

 

 

25,573

 

 

 

(104,334

)

 

 

51,837

 

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock upon exercise of stock options

 

 

10

 

 

 

25

 

 

 

29

 

 

 

705

 

Payment of withholding taxes on net share settlements of restricted stock units

 

 

(4,828

)

 

 

(5,830

)

 

 

(6,894

)

 

 

(11,260

)

Repurchase of common stock

 

 

(22,434

)

 

 

 

 

 

(91,458

)

 

 

 

Payment of finance lease obligations

 

 

(17

)

 

 

(16

)

 

 

(34

)

 

 

(35

)

Payment of tax distributions to redeemable noncontrolling interest holders

 

 

(10

)

 

 

(4,172

)

 

 

(38

)

 

 

(12,691

)

Change in gross advance payments received from third-party transaction processor

 

 

(552

)

 

 

21,243

 

 

 

(2,674

)

 

 

(2,363

)

Net cash (used in) provided by financing activities

 

 

(27,831

)

 

 

11,250

 

 

 

(101,069

)

 

 

(25,644

)

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

 

 

(118

)

 

 

(700

)

 

 

211

 

 

 

(912

)

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

 

 

(97,060

)

 

 

30,658

 

 

 

(109,511

)

 

 

112,876

 

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

 

 

471,681

 

 

 

330,498

 

 

 

484,132

 

 

 

248,280

 

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

 

$

374,621

 

 

$

361,156

 

 

$

374,621

 

 

$

361,156

 

 

 


 

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

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

GAAP consolidated net income

 

$

13,817

 

 

$

18,061

 

 

$

25,683

 

 

$

36,899

 

Stock-based compensation expense

 

 

15,827

 

 

 

26,457

 

 

 

30,804

 

 

 

54,299

 

Amortization of intangible assets

 

 

7,507

 

 

 

7,672

 

 

 

15,041

 

 

 

15,377

 

Income tax effects and adjustments

 

 

(3,306

)

 

 

(7,497

)

 

 

(8,672

)

 

 

(15,361

)

Non-GAAP consolidated net income

 

 

33,845

 

 

 

44,693

 

 

 

62,856

 

 

 

91,214

 

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

 

 

853

 

 

 

6,679

 

 

 

(418

)

 

 

13,752

 

Non-GAAP net income attributable to common stockholders

 

$