CarGurus (CARG) Q3 2024 earnings summary

Executive summary

• Marketplace revenue grew 15% year-over-year in Q3 2024, with strong dealer engagement, product innovation, and expanded paying dealer base in both U.S. and international markets.

• GAAP net income rose 19% year-over-year to $22.5 million, and Non-GAAP Adjusted EBITDA increased 33% to $64.9 million, exceeding guidance.

• Digital Wholesale segment revenue and transactions declined significantly, impacted by lower volumes and asset impairments.

• Board authorized a $200 million share repurchase program for fiscal 2025, following $146 million in repurchases YTD.

• Strengthened executive team with new Chief People Officer and Chief Revenue Officer appointments.

Financial highlights

• Q3 2024 total revenue was $231.4 million, up 5% year-over-year, with Marketplace revenue at $204 million, up 15%.

• Non-GAAP gross profit was $192 million, up 13% year-over-year, and gross margin improved to 83%.

• Non-GAAP diluted EPS was $0.45, up 32% year-over-year; GAAP net income margin was 10%.

• Free cash flow for Q3 was $41.3 million, and cash and cash equivalents at period end were $246.7 million.

• For the nine months ended September 30, 2024, revenue declined 4% to $665.8 million, with a net loss of $24.9 million due to $144.4 million in impairment charges.

Outlook and guidance

• Q4 2024 guidance: total revenue $219–$239 million, Marketplace revenue $208–$213 million, Non-GAAP Adjusted EBITDA $72–$80 million, Non-GAAP EPS $0.50–$0.55.

• Full-year 2024 guidance: total revenue $885–$905 million, Marketplace revenue $794–$799 million, Non-GAAP Adjusted EBITDA $243–$251 million, Non-GAAP EPS $1.67–$1.73.

• Guidance assumes continued dealer acquisition and expansion, excluding major macroeconomic disruptions.

• Board authorized a new $200 million share repurchase program effective January 2025.

• Management expects existing liquidity and borrowing capacity to be sufficient for at least the next 12 months.