CarGurus (CARG) Citi's 2024 Global TMT Conference summary

Executive transition and business overview

• New CFO Elisa Palazzo joined seven months ago, bringing two decades of Wall Street and internet sector experience.

• The business is described as market and product leader, with a dealer-centric approach and a focus on continuous innovation.

• Achieved five consecutive quarters of top-line revenue acceleration and three quarters of double-digit growth, with strong operating leverage.

Macroeconomic and industry trends

• Used car supply has normalized post-COVID, with days on lot stable but elevated, incentivizing dealer advertising.

• Elevated interest rates constrain demand, but this drives more dealer advertising.

• New car inventory is recovering, leading to increased OEM advertising.

• Older and lower-priced vehicles are trading more due to affordability constraints.

Platform performance and product innovation

• Monthly unique users declined year-over-year, but lead quality and volume improved due to marketing efficiency and product innovation.

• Digital Deal product adoption is at 30% of the dealer base, with leads converting three times higher than traditional leads.

• Enhanced AI-driven search and personalization have improved lead dispersion and conversion.

• App engagement is high, with 80% self-registration and 28% of leads coming from the app.