CarGurus (CARG) Q2 2024 earnings summary

Executive summary

• Q2 2024 Marketplace revenue grew 14% year-over-year, marking the third straight quarter of double-digit growth, while consolidated GAAP net loss was $68.7M, impacted by a $127.7M goodwill and asset impairment; Non-GAAP Adjusted EBITDA rose 23% to $55.6M.

• Marketplace business accelerated for the fifth consecutive quarter, with margins expanding sequentially and year-over-year.

• Marketplace growth was driven by higher adoption of add-on products, premium subscriptions, and global dealer expansion.

• Digital Wholesale revenue and transaction volume declined sharply, contributing to the impairment charge and net loss.

• Share repurchases totaled $61M in Q2, representing 2.5% of outstanding capital.

Financial highlights

• Q2 2024 total revenue was $218.7M, down 9% year-over-year; six-month revenue was $434.5M, down 8%.

• Non-GAAP consolidated adjusted EBITDA was $55.6M, up 23% year-over-year, with a margin of 25%.

• Non-GAAP net income attributable to common stockholders was $42.7M, or $0.41 per diluted share.

• Gross profit margin improved to 83% in Q2, up from 68% a year ago.

• Cash, cash equivalents, and short-term investments at period end were $216.2M, with no long-term debt outstanding.

Outlook and guidance

• Q3 2024 guidance: total revenue $212–$232M, Marketplace revenue $199–$204M, Non-GAAP Adjusted EBITDA $56–$66M, Non-GAAP EPS $0.38–$0.44.

• Guidance is based on current market trends and excludes major macroeconomic disruptions and FX impacts.

• Management expects existing liquidity and access to a $400M revolver to be sufficient for at least the next 12 months.