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Mar 31, 2020
Cargurus Q1 2020 Earnings Report
CarGurus' financial results for Q1 2020 were announced, demonstrating resilience amidst industry turmoil.
Key Takeaways
CarGurus reported a 17% increase in total revenue, reaching $157.7 million. GAAP operating income was $12.0 million, and GAAP net income was $12.7 million. The company also highlighted its actions to support dealer customers and its focus on innovation and cost management in response to the COVID-19 pandemic.
Total revenue increased by 17% year-over-year, reaching $157.7 million.
GAAP operating income was $12.0 million, while non-GAAP operating income reached $25.1 million.
GAAP net income was $12.7 million, and non-GAAP net income was $22.1 million.
CarGurus implemented cost-saving initiatives, including workforce reduction and executive salary cuts, in response to the COVID-19 pandemic.
Cargurus
Cargurus
Forward Guidance
While the macro-economic environment makes it difficult to anticipate the many variables impacting the economy, the industry and CarGurus’ business, recent events are encouraging.
Positive Outlook
- Rate of dealer cancellations that peaked in late March and early April has since stabilized.
- CarGurus recently launched contactless sales features in its U.S., Canada and United Kingdom marketplaces.
- CarGurus launched a pilot program of the Delivery service product in Canada and the United Kingdom.
- CarGurus launched WhatsApp text and chat interactions in the United Kingdom.
- CarGurus has been providing information to dealers to help them navigate the global health crisis, stay current on CarGurus product developments and strategize for the months ahead.
Challenges Ahead
- The human and economic toll of the COVID-19 pandemic is staggering.
- A number of states have issued shelter in place or stay-at-home orders and have restricted the ability to buy and sell automobiles.
- CarGurus has announced various fee reductions across its operating marketplaces for April through June 2020.
- CarGurus’ total paying dealers in the U.S. fell by 1,107 during the first quarter of 2020.
- CarGurus announced its decision to cease marketplace operations in Germany, Italy, and Spain, and halt new international expansion efforts.