CarGurus Inc is an online automotive marketplace connecting buyers and sellers of new and used cars. The company operates through two segments: U.S. Marketplace and Digital Wholesale, generating the majority of its revenue from the U.S. Marketplace.
Performance Overview
CarGurus Inc (CARG, Financial) reported total revenue of $218.7 million for Q2 2024, surpassing the analyst estimate of $216.09 million. However, the company posted a consolidated GAAP net loss of $68.7 million, significantly wider than the previous year's net income of $13.8 million. The non-GAAP adjusted EBITDA stood at $55.6 million, marking a 23% year-over-year increase.
Key Financial Highlights
| Metric | Q2 2024 | Variance from Prior Year |
|---|---|---|
| Total Revenue | $218.7 million | -9% |
| Marketplace Revenue | $195.2 million | +14% |
| Wholesale Revenue | $13.1 million | -59% |
| Product Revenue | $10.4 million | -72% |
| Gross Profit | $182.4 million | +11% |
| GAAP Net Loss | $(68.7) million | -597% |
| Non-GAAP Adjusted EBITDA | $55.6 million | +23% |
Challenges and Achievements
The company faced significant challenges, including a 59% decline in wholesale revenue and a 72% drop in product revenue. These declines were partially offset by a 14% increase in marketplace revenue, driven by higher adoption of add-on products and a shift towards premium subscription tiers.
CarGurus Inc (CARG, Financial) also repurchased $61 million worth of shares during the quarter, representing 2.5% of its outstanding capital. This move indicates a strong commitment to returning value to shareholders.
Income Statement and Balance Sheet Insights
From the income statement, the total operating expenses surged to $276 million, primarily due to a $127.5 million goodwill and other long-lived asset impairment. This contributed to the widened net loss. On the balance sheet, cash and cash equivalents stood at $216.2 million, down 31% from December 31, 2023.
Key Performance Indicators
| Metric | Q2 2024 | Variance from Prior Year |
|---|---|---|
| U.S. Paying Dealers | 24,446 | +1% |
| International Paying Dealers | 6,906 | 0% |
| U.S. QARSD | $6,942 | +14% |
| International QARSD | $1,935 | +20% |
Analysis and Outlook
Despite the widened net loss, CarGurus Inc (CARG, Financial) showed resilience with a strong increase in marketplace revenue and non-GAAP adjusted EBITDA. The company's focus on premium subscription tiers and add-on products appears to be paying off. However, the significant decline in wholesale and product revenues remains a concern.
Looking ahead, CarGurus Inc (CARG, Financial) has provided guidance for Q3 2024, with total revenue expected to range between $212 million and $232 million, and non-GAAP EPS between $0.38 and $0.44. The company aims to continue optimizing its go-to-market execution and operational capabilities to drive long-term growth.
Explore the complete 8-K earnings release (here) from CarGurus Inc for further details.
