Slide 1: Fourth Quarter and Full Year 2023 Earnings
Fourth Quarter and Full Year 2023 Earnings February 22, 2024 1
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws. All statements other than statements of historical facts are forward- looking statements. These statements often use words such as “believe,” “expect,” “project,” “an
Slide 3: Definitions: Non-GAAP Financial Measures
Definitions: Non-GAAP Financial Measures This presentation discusses Adjusted EBITDA, Adjusted EBITDA margin and Free Cash Flow and Adjusted Operating Expenses. These financial measures are not prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). These
Slide 4: A Strong Year of Growth in 2023
A Strong Year of Growth in 2023 Revenue Growth ARPD Growth Adjusted EBITDA +5% YOY +7% YOY 28% Margin 4
Slide 5: Advancing Our Platform Strategy: Customers
Advancing Our Platform Strategy: Customers Advancing Our Platform Strategy CUSTOMERS REPACKAGING new car supply year over year 5
Slide 6: Experience Report Helps Dealers Improve Retail Experience
Advancing Our Platform Strategy: Customers Experience Report Helps Dealers Improve Retail Experience ● Schomp Automotive Group leverages Experience Report to actively manage the reputation of their 12-store group GEORGE LAWTON ● Monitors progress monthly via Experience Marketing Operations Report Ma
Slide 7: Advancing Our Platform Strategy: Consumers
Advancing Our Platform Strategy: Consumers Advancing Our Platform Strategy CONSUMERS YOUR GARAGE NEW CAR HUB GENERATIVE AI 7
Slide 8: Company Record for Total Traffic in 2023
Audience Company Record for Total Traffic in 2023 Total Traffic (MM) 615MM visits +5% YOY 8
Slide 9: Continued Adoption of Our Digital Solutions
Solutions Continued Adoption of Our Digital Solutions Website Customers AccuTrade Connected Customers ~7,300 ~880 *Website customer data includes D2C Media effective Q4’23 9
Slide 10: Dealer Usage of AccuTrade Continues to Climb
Solutions Dealer Usage of AccuTrade Continues to Climb 590K dealer appraisals in Q4, +15% QOQ 10
Slide 11: FordDirect Selects AccuTrade as its Preferred Trade and Appraisal Solution
Solutions FordDirect Selects AccuTrade as its Preferred Trade and Appraisal Solution Opportunity to Work With 3,000+ Ford and Lincoln Retailers 11
Slide 12: Key Trends From New Monthly Industry Insights Report
Industry Insights Key Trends From New Monthly Industry Insights Report More Shift to a Affordable Buyers Market New Cars Increased Used-Car New-Car Scarcity Inventory increaseIncreasing in referral traffic 12
Slide 13: 2024 National Automobile Dealers Association Conference (NADA)
NADA 2024 2024 National Automobile Dealers Association Conference (NADA) ● Showcased industry-leading platform and solutions to thousands of current and prospective customers ● Hosted Investor Breakfast with hands-on product demos ● Launched VIN Performance Media 13
Slide 14: Five Key Growth Drivers for 2024
Key Growth Drivers Five Key Growth Drivers for 2024 Grow Transform Create Grow Unlock the Dealer OEM Platform Consumers Cross-Sell Customers Relationships Advantages increase in referral traffic 14
Slide 15: Revenue Growth of +7% YOY
Revenue Revenue Growth of +7% YOY Quarterly Revenue ($MM) Dealer Revenue Drivers of Revenue Growth +8% YOY ● Dealer Revenue +8% YOY driven by growth in solutions, 2023 Marketplace Repackaging Initiative and Media ● OEM & National up 8% YOY, driven by +24% increase in OEM Revenue ● Other Revenue down
Slide 16: Disciplined Investment in Growth
Operating Expenses Disciplined Investment in Growth Quarterly Adjusted Operating Expense ($MM) Drivers of Changes in Expense ● YOY increase primarily due to continued investments in people, an increase in depreciation and amortization, and investments in marketing to support the launch of our Cars C
Slide 17: Continued Sequential Improvement in Adjusted EBITDA
Adjusted EBITDA Continued Sequential Improvement in Adjusted EBITDA Quarterly Adjusted EBITDA ($MM) & Margin (% Revenue) Drivers of Adjusted EBITDA ● Delivered Q4 Adjusted EBITDA margin of 31%, improved ~250 bps sequentially ● YOY Adjusted EBITDA increased 12% 17
Slide 18: Full Year Revenue Up 5% YOY
Operating Metrics Full Year Revenue Up 5% YOY ($MM) 2023 2022 REVENUE $689.2 $653.9 DEALER REVENUE $621.7 $579.2 OPERATING EXPENSES $635.1 $587.8 ADJUSTED OPERATING EXPENSES $594.1 $555.9 ADJUSTED EBITDA $194.9 $186.7 Note: We define Adjusted Operating Expenses as total operating expenses adjusted t
Slide 19: Strength Across Key Operating Metrics
Operating Metrics Strength Across Key Operating Metrics Q4 2023 Q4 2022 AVERAGE MONTHLY UNIQUE VISITORS 24.3 MM 24.6 MM TRAFFIC (VISITS) 142.7 MM 140.4 MM MONTHLY ARPD 1 $2,523 $2,361 DEALER CUSTOMERS 2 19,504 19,506 ¹ARPD excludes revenue from Dealer Inspire and D2C Media digital advertising servic
Slide 20: Robust Cash Flow, Solid Balance Sheet
Cash Flow Robust Cash Flow, Solid Balance Sheet YTD Free Cash Flow Trend ($MM) Total Debt ($MM) & Net Leverage Ratio Includes $9MM Tax Refund Related to CARES Act Reflects borrowing to fund AccuTrade acquisition Reflects borrowing to fund D2C Media acquisition Total Debt Total Net Leverage Ratio 20
Slide 21: 2024 Outlook
Outlook 2024 Outlook Q1 2024 OUTLOOK ● Q1 Revenue: $179.0 to $181.0 million ○ Represents 7% to 8% YOY growth ○ Reflects continued strong growth in Dealer revenue, D2C Media and the full year impact of the 2023 Marketplace Repackaging initiative ● Q1 Adjusted EBITDA margin: 27% to 29% FULL YEAR 2024
Slide 22: Q&A
Q&A 22
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 24
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 25
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations (unaudited and in thousands) 26