Slide 1: Q3 2023 Business Update
Q3 2023 Business Update November 7, 2023 1
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain information contained in this presentation, other matters discussed today and answers that may be given in response to questions may include “forward-looking statements.” We may, in some cases, use terms such as “aim,” “anticipates,” “beli
Slide 3: Consumers needed easy, trustworthy answers to their car shopping questions
Consumers needed easy, trustworthy answers to their car shopping questions… 1 Where can I buy a car like this if it is not in my area? 2 How do I know if I’m getting the best financing? 3 Have others liked working with this dealer? 4 Can I complete some steps of the purchase online? 5 Can I sell my
Slide 4: We created a listings platform to meet their needs
We created a listings platform to meet their needs… But consumer and dealer needs continued to change… We became the #1 …But needs continued to …So we created an unmatched listings platform1… change… end-to-end transaction- enabled platform Largest selection of vehicles in the U.S.2 86% Proprietary
Slide 5: So, we transformed to meet the market
So, we transformed to meet the market… We’ve built a full lifecycle transaction platform on top of the nation’s largest marketplace Dealer-To-Dealer Consumer-to-Dealer Digital Retail Wholesale Sell My Car Largest Consumer IMCO3 Audience of any Largest Automotive Dealer Network1 Marketplace in the U.
Slide 6: Creating full lifecycle solutions for dealers and consumers
…While creating full lifecycle solutions for dealers and consumers Linking wholesale and retail transactions more tightly for dealers through shared data on a single platform will help dealers optimize margins Consumers are eager to transact with confidence as we earn their trust through access to m
Slide 7: Accelerating growth in multiple large TAMs
…And accelerating growth in multiple large TAMs We have constructed a portfolio of products into a platform with stability, stickiness, and long growth runways D2D WHOLESALE MARKETPLACE TAM1: $15B TAM1: $3B Dealer-To-Dealer Consumer-to-Dealer Digital Retail 2022 Rev: $320M 2022 Rev2: $659M Wholesale
Slide 8: Listings, Digital Wholesale and Digital Retail Create Powerful Synergies
The Combination of Listings, Digital Wholesale and Digital Retail Creates Powerful Synergies Unavailable Elsewhere Bundling to drive stickiness with consumers and dealers Operational efficiencies Sell My Car access Consolidated call center support for CO + CG dealers to serve Sell My Car and Digital
Slide 9: Marketplace
Marketplace 9
Slide 10: CarGurus Listings marketplace is a platform of scale
CarGurus Listings marketplace is a platform of scale with a ready-to-purchase consumer audience Largest Consumer Audience Of Any Automotive Marketplace In The U.S.1 Shoppers are serious… U.S. average monthly visitors2 Each unique visitor spends more time on CarGurus than our leading competitors’ sit
Slide 11: The combination delivers a strong ROI for dealers
The combination of which delivers a strong ROI for dealers Providing dealers the best investment Built on technology to Where the “ CarGurus has been the best investment for our dealership! The support team we have is amazing. They are always available when we deliver transparency shoppers are need
Slide 12: Innovating to stay ahead of the curve
Innovating to stay ahead of the curve & sell more efficiently… New Products Driving Engagement, Insights, & Efficiency Geographic Expansion ✔ Meet shopper demand CarGurus RPM® Improve Engagement ✔ Expand market ✔ Grow shopper connections Sell My Car ✔ Optimize inventory management Dealer ✔ Pricing t
Slide 13: Allowing dealers to flexibly serve the consumer
…And allowing dealers to flexibly serve the consumer Offline | At Dealership Offline | At Dealership Vehicle Calculator Credit Trade-in Payment Protection Delivery Hard-pull Deposits Finance-in-Advance Reservations CarGurus is reimagining a dealer-aligned way for consumers to transact – allowing bot
Slide 14: Introducing Sell My Car – Top Dealer Offer
Introducing Sell My Car – Top Dealer Offer Top Dealer Offer empowers consumers to get highly competitive offers and to choose between selling their vehicle at a local dealership or selling 100% online and provides dealers with another source for used inventory and high-intent shoppers 1 Dealer set p
Slide 15: Resulting in our leading position
Resulting in our leading position +9.2% YoY U.S. QARSD1 $6,332 A Unique Combination $6,110 $5,943 $5,800 $5,842 $5,771 $5,713 $5,602 $5,633 Scale ROI Innovation 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Paying Dealers (thousands)1 U.S. International 31.29 31.31 31.29 31.10 31.19 6.60 6.7
Slide 16: Marketplace (U.S. Segment & Other) Select Financials
Marketplace (U.S. Segment & Other) Select Financials REVENUE ($ MILLIONS) GAAP GROSS PROFIT ($ MILLIONS)1 +8.5% YoY $163 +7.6% YoY $155 $178 $152 $150 $151 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 $171 % Margin 91% 91% 91% 91% 92% $167 ADJUSTED EBITDA ($ MILLIONS)2 +6.3% $166 YoY $165 $51 $48 $49 $43 $41 3Q'22
Slide 17: Digital Wholesale
Digital Wholesale 17
Slide 18: Sell My Car: Instant Max Cash Offer
Sell My Car: Instant Max Cash Offer—offering Sell your car 100% online dealers the only direct Get the best offer instantly, sourced from thousands of dealers to consumer channel at scale Get your offer Access to unique inventory is a differentiator for any wholesale platform “ Like most dealerships
Slide 19: CarOffer Platform: sustainably differentiated
CarOffer Platform: sustainably differentiated “ When you're an independent dealer, your time is spent mostly sourcing vehicles…Every piece of inventory we purchase, we have to go find— and the key to that is CarGurus and CarOffer. Combining forces has given CarOffer the secret weapon, and that is th
Slide 20: Digital Wholesale: GMS & Transactions
Digital Wholesale: GMS & Transactions Gross Merchandise Sales (GMS)1 3 Total Transactions2 3 $1,200 45,000 $ MILLIONS $1,075 39,437 40,000 $1,000 35,000 $800 30,000 25,000 $600 $575 20,793 20,000 18,405 $455 17,505 $445 $400 $350 15,000 13,562 10,000 $200 5,000 $0 0 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 3Q'
Slide 21: Digital Wholesale Select Financials
Digital Wholesale Select Financials REVENUE ($ MILLIONS) NON-GAAP GROSS PROFIT (LOSS) ($ MILLIONS)1 2 $14 $261 $9 $6 $7 ($8) 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 % Margin 2% (7%) 13% 20% 16% $120 ADJUSTED EBITDA ($ MILLIONS)1 2 $4 $65 $69 $42 ($2) ($3) ($16) 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 ($21) 3Q'22 4Q'22
Slide 22: Consolidated Financial Overview
Consolidated Financial Overview 22
Slide 23: CarGurus financial highlights
CarGurus financial highlights 1 Strong track record of revenue growth in large total addressable markets 2 End-to-end transaction-enabled Marketplace allows for platform diversity 3 Proven operating leverage and profitability 4 Attractive free cash flow generation 5 High quality revenue: diversified
Slide 24: Financial Performance
Financial Performance CONSOLIDATED REVENUE ($ MILLIONS) CONSOLIDATED ADJUSTED EBITDA ($ MILLIONS)1 +47.8% YoY $1,655 $270 $49 $188 42% $33 CAGR $951 $161 $589 $551 $77 $454 $317 $198 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY 2019 FY 2020 FY 2021 FY 2022 3Q'22 3Q'23 24 1. Please see the App
Slide 25: Fourth Quarter & Full-Year 2023 Outlook
Fourth Quarter & Full-Year 2023 Outlook 4Q’23 FY 2023 Total Revenue $208 million - $228 million $899 million - $919 million Product Revenue $12 million - $22 million $108 million - $118 million Non-GAAP Consolidated Adj. EBITDA $46 million - $54 million $181 million - $189 million Non-GAAP Earnings
Slide 26: CarOffer Acquisition
CarOffer Acquisition 26
Slide 27: Transaction Summary
Transaction Summary Business Acquisition of remaining interest in CarOffer Terms & Valuation $75M all-cash acquisition Financing Fully financed with cash on hand Purchase agreement executed on November 6, 2023 Closing Closing expected to occur in December 20231 Step 1: $140.3M (50% stock, 50% cash)
Slide 28: Compelling Strategic Rationale
Compelling Strategic Rationale 1 Provide synergistic platform benefits for consumer and dealer customers 2 Accelerate new product opportunities for our end-to-end platform 3 Recognize operational synergies of integrated platform sooner 4 Serve the full consumer vehicle-buying lifecycle 5 Bundling op
Slide 29: Appendix
Appendix 29
Slide 30: Understanding our external presentation
Understanding our external presentation… Marketplace Marketplace • Listings Subscription Packages • Listings Subscription Packages • RPM Digital Advertising Suite, Highlight • RPM Digital Advertising Suite, Highlight • OEM Advertising • OEM Advertising • Digital Retail: Area Boost, Finance Partnersh
Slide 31: Reconciliations of non-GAAP Digital Wholesale Gross Profit (Loss)
Reconciliations of non-GAAP Digital Wholesale Gross Profit (Loss) and non-GAAP Digital Wholesale Gross Profit (Loss) Margin ($ thousands) 3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 GAAP Wholesale Revenue $ 47,045 $ 23,659 $ 25,186 $ 31,952 $ 21,735 GAAP Product Revenue 214,100 96,838 39,650 36,835 19,775 GAAP Di
Slide 32: Reconciliations of Marketplace Adjusted EBITDA
Reconciliations of Marketplace (U.S. Marketplace Segment & Other) Adjusted EBITDA ($ thousands) 3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 U.S. Marketplace Segment Income from Operations $ 34,660 $ 35,608 $ 26,539 $ 24,619 $ 33,285 Other Loss from Operations (2,405) (2,506) (1,255) (574) 1,462 GAAP Marketplace (
Slide 33: Reconciliations of Digital Wholesale Adjusted EBITDA
Reconciliations of Digital Wholesale Adjusted EBITDA ($ thousands) 3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 GAAP Digital Wholesale Loss from Operations1 $ (3,599) $ (3,481) $ (11,225) $ (6,307) $ (11,652) Impact of Depreciation and Amortization1 8,420 8,551 8,693 8,702 9,334 Impact of Impairments of Long-Lived
Slide 34: Reconciliations of Consolidated Adjusted EBITDA
Reconciliations of Consolidated Adjusted EBITDA ($ thousands) 1Q’22 1Q’23 2Q’22 2Q’23 3Q’22 3Q’23 GAAP Consolidated Net Income $ 18,838 $ 11,866 $ 18,061 $ 13,817 $ 18,824 $ 18,973 Impact of Depreciation and Amortization 11,185 11,576 11,234 11,667 11,183 12,470 Impact of Impairments of Long-Lived A
Slide 35: Reconciliations of Consolidated Adjusted EBITDA
Reconciliations of Consolidated Adjusted EBITDA ($ thousands) FY2019 FY2020 FY2021 FY2022 GAAP Consolidated Net Income $ 42,146 $ 77,553 $ 110,373 $ 78,954 Impact of Depreciation and Amortization 7,817 10,191 40,476 45,334 Impact of Impairments of Long-Lived Assets - 1,151 3,128 165 Impact of Stock-