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Jun 30, 2022
Cargurus Q2 2022 Earnings Report
CarGurus's financial performance for Q2 2022 was exceptional, driven by strategic acquisitions, operational improvements, and innovative product launches.
Key Takeaways
CarGurus reported a significant increase in total revenue, reaching $511.2 million, a 135% increase year-over-year. The company's performance was driven by new dealer acquisitions, re-engagement of returning dealers, operational improvements in the CarOffer business, and the launch of innovative Digital Retail product offerings.
Total revenue increased by 135% year-over-year, reaching $511.2 million.
GAAP operating income was $23.5 million, while non-GAAP operating income reached $57.7 million.
GAAP consolidated net income was $18.1 million, and non-GAAP consolidated net income was $44.7 million.
Cash, cash equivalents, and short-term investments totaled $368.2 million with no debt.
Cargurus
Cargurus
Cargurus Revenue by Segment
Revenue by Segment
U.S. Marketplace Revenue
CapyFin.comDigital Wholesale Revenue
CapyFin.com Forward 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:
Positive Outlook
- 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.
Challenges Ahead
- 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.
- 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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income