Cargurus, Inc. · NASDAQ:CARG
Cargurus — Investor Day (May 2022)
102 slides from Cargurus's investor day presentation, May 25, 2022
Slide 1: CarGurus' Investor Day May 25th, 2022
CarGurus® CarGurus’ Investor Day May 25th, 2022
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 “anticipates,” “believes,”
Slide 3: Today's agenda
Today’s agenda 1:00 PM Welcome and Opening Remarks KIRNDEEP SINGH Vice President, Investor Relations 1:05 PM Evolution to a Dynamic Transaction-Enabled Platform JASON TREVISAN Chief Executive Officer 1:30 PM Dealer Value Proposition SAM ZALES President, Chief Operating Officer SPENCER SCOTT EVP, Nor
Slide 4: We give people the power to reach their destination
We give people the power to reach their destination 4
Slide 5: Transformation to a Transaction-Enabled Platform
CarGurus® Transformation to a Transaction-Enabled Platform LED BY | Jason Trevisan Chief Executive Officer
Slide 6: Executive summary
Executive summary 1 Transformed the business from a shopping marketplace to a transaction platform to serve market trends 2 Transaction platform captures full lifecycle customer needs: Dealers – source, market, sell Consumers – shop, finance, buy, sell 3 Standalone offerings are differentiated, syne
Slide 7: The automotive value chain is rapidly moving online
The automotive value chain is rapidly moving online WHOLESALE1 % Digital Wholesale Purchases 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2018 2019 2020 2021 RETAIL TRANSACTIONS2 60% of consumers prefer to do more from home 90% of dealers expect to continue, or accelerate, digital retailing at their deal
Slide 8: We've transformed to meet the market
We’ve transformed to meet the market We’ve built a full lifecycle transaction platform on top of the world’s largest marketplace DEALER-TO-DEALER WHOLESALE CARGURUS INSTANT MAX CASH OFFER DIGITAL RETAIL Largest Dealer Network1 30.9K Global Paying Dealers CG CarGurus® FOUNDATIONAL LISTINGS BUSINESS L
Slide 9: Creating full lifecycle solutions for dealers and consumers
…While creating full lifecycle solutions for dealers and consumers Linking wholesale and retail transactions more tightly through shared data on a single platform will help dealers optimize margins 98% Digital Deal pilot dealers remain at CarGurus 1/3 CarOffer buyers using CarGurus IMV in their bidd
Slide 10: Accelerating growth in multiple large TAMs
...And created accelerating growth in multiple large TAMs INSTANT MAX CASH OFFER TAM1: $400B 2021 Rev: $89M Mkt Share: <1% 2021 Growth: NA D2D WHOLESALE TAM1: $15B 2021 Rev: $225M Mkt Share: 2% 2021 Growth: >1,000% We have constructed a portfolio of products into a platform with stability, stickines
Slide 11: Strong unit economics, consolidated profitability and growth
Strong unit economics, consolidated profitability and growth Key Stats DEALER-TO-DEALER WHOLESALE $225M 2021 Revenue 38% 2021 Non-GAAP Gross Margin1 40%-45% Long-term Non-GAAP Gross Margin Target2 CARGURUS INSTANT MAX CASH OFFER $89M 2021 Revenue 4% 2021 Non-GAAP Gross Margin1 5%-6% Long-term Non-GA
Slide 12: What you will hear today
What you will hear today Longstanding dealer value proposition of ROI, scale and efficiency is now end-to-end helping dealer’s source, market and sell Leveraging trust and transparency position with consumers into full lifecycle – shop, finance, buy and sell Combining listings, digital retail, digit
Slide 13: Buy, Market, Sell
CarGurus® BUY CarOffer MARKET SELL 13
Slide 14: Source and Sell Wholesale
CarGurus® Source and Sell Wholesale DEALER VALUE PROPOSITION LED BY | Sam Zales President & Chief Operating Officer
Slide 15: CarOffer instant trade solution disrupting the traditional auction model
CarOffer instant trade solution disrupting the traditional auction model 1 Differentiated: CarOffer is fundamentally more efficient, sophisticated, and scalable than a traditional auction model 2 TAM: There is a long runway of growth ahead; more dealers and more wholesale share per dealer 3 Instant
Slide 16: Remarkable high growth and profitable business
Remarkable high growth and profitable business CAROFFER: 2.5 YEARS OLD INSTANT MAX CASH OFFER: 8-MONTHS OLD IN THAT TIME… HAS OPERATED IN A VOLATILE WHOLESALE MARKET Incentivized to grow profitability GROSS PROFIT2 CarOffer1 Competitor #1 Competitor #2 $ Millions $60.0 $50.0 $40.0 $30.0 $20.0 $10.0
Slide 17: CarOffer platform: sustainably differentiated
CarOffer platform: sustainably differentiated EFFICIENT AUTOMATIC INVENTORY OFFERS 24/7 Always on 24/7 matrix No geographic boundaries, nationwide transactions Capital-efficient inspections, transportation and payment ENHANCED SOPHISTICATION 150,000+ active-matrix rules, trim/option matching Matrix
Slide 18: Massive runway for growth
Massive runway for growth RAPID INCREASE IN DIGITAL D2D AS A % SHARE OF WHOLESALE1 1% 3% 4% 7% 2018 2019 2020 2021 TAKING SHARE OF WHOLESALE1 2% 98% CarOffer FY Revenue TAM There is a long runway for growth ahead: More dealers, more wholesale share per dealer, and more products 1. CarGurus estimates
Slide 19: Gaining more dealers and greater dealer wallet share
Gaining more dealers and greater dealer wallet share MORE DEALERS TO ENROLL1… CarOffer Enrolled Dealers CarGurus U.S. Freemium Dealers CarGurus U.S. Paying Dealers 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 1Q’21 1Q’22 …MEANWHILE AVG. TRANSACTIONS PER DEALER CONTINUE TO G
Slide 20: Instant Max Cash Offer: only direct to consumer channel at scale
Instant Max Cash Offer: offering dealers the only direct to consumer channel at scale Sell your car 100% online Get the best offer instantly, sourced from thousands of dealers. Get your offer License plate VIN License plate State Enter your license plate MA Get Started Access to unique inventory is
Slide 21: Announcing expansion into new states
Announcing expansion into new states 3Q 2021 TX, FL, MA, GA, MI, PA, CT, RI 4Q 2021. AR, DE, IL, IN, IA, LA, MO, NE, NJ, TN, VA, DC, NY, MD, MN 1Q 2022 CA, NC, SC, OH, AZ Today NV, UT, NM, CO, WA Covering ~85% of the U.S. Population 21 CarGurus®
Slide 22: Standardized Instant Max Cash Offer platform across the ecosystem
Creating a standardized Instant Max Cash Offer platform that can be leveraged across the automotive ecosystem DEALER WEBSITES Dealers get leads from their website with CarOffer-backed valuations via ConsumerLane Get a Real-Time Offer for Your Car in Seconds Sell Your Car in 3 Easy Steps CONSUMER-FAC
Slide 23: Business philosophy
Business philosophy GROWTH PROFITABILITY 23 CarGurus®
Slide 24: Market
CarGurus® Market DEALER VALUE PROPOSITION LED BY | Spencer Scott Executive Vice President, North American Sales and Service
Slide 25: Continuing to gain market share with unmatched scale, performance, and innovation
Continuing to gain market share with unmatched scale, performance, and innovation 1 CarGurus is a platform of scale, attracting the largest network of dealers and their inventory through its’ industry leading consumer traffic 2 Built on the foundation of trust and transparency, our platform attracts
Slide 26: 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 AUDIENCE1 U.S. monthly unique visitors2 31M+ CarGurus® 27M+ Competitor 13 19M+ Competitor 23 7M+ Competitor 33 SHOPPERS ARE SERIOUS… 17 mins Average minutes spent per visitor on CarGurus
Slide 27: The combination delivers a strong ROI for dealers
The combination of which delivers a strong ROI for dealers BUILT ON TECHNOLOGY TO DELIVER TRANSPARENCY WHERE THE SHOPPERS ARE DELIVERING STRONG ROI A TRUSTED PARTNER TO SUPPORT DEALER NEEDS DEALERS SELL CARS FASTER ON CARGURUS 16% & 22% faster than two competitors1 27 1. Comparative Analysis of US V
Slide 28: Providing dealers with the flexibility they need
Providing dealers with the flexibility they need SUBSCRIPTION TIERS THAT BEST FIT DEALERS’ NEEDS FREE Restricted List inventory for free Capped leads GOOD Enhanced Subscription Unlock unlimited leads Dealership branding BETTER Featured Top 3 vehicle placement Increase Connections BEST Featured Prior
Slide 29: Innovating to stay ahead of the curve
Innovating to stay ahead of the curve & sell more efficiently New Products Driving Engagement, Insights, & Efficiency Area Boost CarGurus RPM® IMPROVE ENGAGEMENT Dealer Dashboard/App UNIQUE INSIGHTS CarGurus Digital Deal INCREASE EFFICIENCY Meet shopper demand Expand market Grow shopper connections
Slide 30: Dealers are staying and using our products more
…As a result, dealers are staying and using our products more KEEPING DEALERS… Indexed Annual Average of Monthly Retention 1.01 1.00 0.99 0.98 2017 2018 2019 2020 2021 2022… AND DRIVING UPSELL Premium Placement Listings share of MRR 50% 45% 40% 35% 30% 25% 2017 2019 2022 Gaining loyalty and traction
Slide 31: Despite leading position, we have long runway for growth
Despite leading position, we have long runway for growth A Unique Combination Scale ROI Innovation Enhancing Dealer Relationships Growing U.S. QARSD1 $5,133 3Q’20 $5,304 4Q’20 $5,466 1Q’21 $5,550 2Q’21 $5,602 3Q’21 $5,633 4Q’21 $5,713 1Q’22 Gain U.S. Market Share2 42% Unsold Path to 30K U.S. Paying
Slide 32: Sell
CarGurus® Sell DEALER VALUE PROPOSITION LED BY | Brad Rosenfeld Executive Vice President of Digital Retail Commercialization
Slide 33: Providing ROI and driving innovation through digital retail
Providing ROI and driving innovation for our dealers through digital retail offerings 1 Empowering dealers with the tools they need to compete in an increasingly digital landscape 2 Simplifying the digital retail process and helping dealers become more efficient operators 3 Helping dealers sell more
Slide 34: Dealers are preparing for more online transaction capabilities
Dealers are preparing for more online transaction capabilities Shoppers want to do more…. 60% of CG shoppers prefer to do more of the car-buying process from home1… and CarGurus customers want to do even more online. 80% of CarGurus users are of open to buying online2 95% of CarGurus app users are o
Slide 35: Digital retail offerings are scaling
Our digital retail offerings are scaling and bringing value to dealers and consumers 415K+ Total Digitally Enabled Listings1 Already Seeing the Results 78% Of households have access to more than 30K Area Boost listings3 $1B In loans funded with pre-qual finance in 20212 37% Growth in Q1 year-over-ye
Slide 36: Provide a modern shopping experience
PROVIDE A MODERN SHOPPING EXPERIENCE 36
Slide 37: Streamlining the commerce process provides dealers efficiency
Streamlining the commerce process provides dealers with efficiency and ability to sell more DRIVING EFFICIENCY Consumers are 7x more likely to make an appointment with a dealer through checkout1 26% Of consumer submit a credit application2 SELLING MORE CARS Digital Deal leads close 2X more than stan
Slide 38: Allowing dealers to flexibly serve the consumer
Allowing dealers to flexibly serve the consumer Offline | At Dealership Offline | At Dealership Vehicle Calculator Credit Trade-in Payment Protection Delivery Hard-pull Finance-in-Advance Deposits Reservations Offline | At Dealership CarGurus is reimagining a dealer-aligned way for consumers to tran
Slide 39: Building value along the way
Building value along the way… Finance in Advance 2020 CG Convert 2022 2019 Area Boost 2021 Digital Deal FUTURE STATE Empowering dealers to compete with online retailers Facilitating the transaction on more listings Flexibility to sell on or offline without geographic boundaries Multiple paths of mon
Slide 40: Minute Break
CarGurus® 15 Minute Break 40
Slide 41: Shop, Finance, Buy & Sell
CarGurus® Shop, Finance, Buy & Sell CONSUMER VALUE PROPOSITION LED BY | Sam Zales President & Chief Operating Officer
Slide 42: Building upon our foundation to become lifecycle partners with consumers
Building upon our foundation to become lifecycle partners with consumers 1 History of trust and transparency wins the consumer audience in Listings, and will in transaction-enabled platform 2 Financing capabilities provide optimal multi-lender shopping experience 3 Instant Max Cash Offer offers cons
Slide 43: Consumers needed easy, trustworthy answers to car shopping questions
Consumers needed easy, trustworthy answers to their car shopping questions…. Where can I buy a car like this if it is not in my area? Can I sell my car for a fair price? What type of vehicle should I buy? How do I know if I’m getting the best financing? What if this dealer is not near me? Can I stil
Slide 44: SHOP: Differentiated listings attract the largest consumer audience
SHOP: Our differentiated listings attracts the largest consumer audience Shop Finance Buy Sell Largest inventory & selection1 Proprietary IMV Unique dealer ratings Rigorous deal ratings Customer-focused sort order #1 most visited automotive shopping site in the U.S.2 44 1. Compared to major online a
Slide 45: Consumer needs changing: adapting to offer same trust and transparency
Consumer needs changing: adapting to offer same trust and transparency We became the #1 listings platform… Proprietary vehicle data IMV price comparison Dealer and deal ratings Largest selection of inventory1 …But consumer needs continued to change… 80% CG users are open to buying online, but want a
Slide 46: Empowering consumers through their automotive journey
Empowering consumers through their automotive journey SHOP FINANCE BUY SELL CarGurus® DIGITAL DEAL Marketplace Provides trust and transparency for a consumer to find a vehicle of their choice Area Boost Enables consumers to search for vehicles outside of their immediate region Financing Options Opti
Slide 47: FINANCE: Customize online before dealer visit
FINANCE: Customize online before dealer visit… Shop Finance Buy Sell Finance-In-Advance Only Takes Minutes Just enter a few basic details to instantly see your options Personalized Real Rates Know your real monthly payment before visiting the dealer No Impact on Your Credit Score Check out your opti
Slide 48: BUY: The best way to buy a used vehicle
BUY: The best way to buy a used vehicle Shop Finance Buy Sell Primary Competition Multiple financing options Deliver to your home Option to test drive in person Reserve your vehicle Largest selection of vehicles3 CarGurus Next 3 Largest Online Marketplaces1,2 Online Retailers2 ? (PARTIAL) Digital De
Slide 49: Sell your car 100% online
SELL YOURS CAR 100% ONLINE 49
Slide 50: SELL: The best way to sell a used vehicle
SELL: The best way to sell a used vehicle Shop Finance Buy Sell MAXIMUM SALES PRICE Highest bid available from thousands of dealers within the CarOffer network FAST Offer in under 2 minutes TRUSTWORTHY Choice of payment, remote inspections and exceptional customer service CONVENIENT PICK-UP OR DROP-
Slide 51: SELL: Instant Max Cash Offer providing highest bids from thousands of dealers
SELL: Instant Max Cash Offer providing the highest bids from thousands of dealers Shop Finance Buy Sell Primary Competition1 Win Rate % CarGurus CarOffer Big Box Retailer Online Retailer #1 Online Retailer #2 Online Marketplace $0-$10K #2 #1 #3 #4 N/A $10K to $20K #2 #1 #3 #4 N/A $20K to $30K #2 #1
Slide 52: Creating a winning platform for every automotive decision
Creating a winning platform for consumers to utilize for every automotive decision SELECTION Most inventory1 More lending options PRICE IMV APRs Instant Max Cash Offer CONVENIENCE Digital-to-in-store Delivery Pick-up or drop-off TRUST Sort order Dealer and deal ratings Multi-vendor shopping 52 1. Co
Slide 53: The Automotive Ecosystem Realized through Powerful Synergies
CarGurus The Automotive Ecosystem Realized through Powerful Synergies LED BY | Tom Caputo Chief Product Officer
Slide 54: Customer and company benefits of a unified platform
Customer and company benefits of a unified platform 1 Combining Listings, Digital Wholesale, Instant Max Cash Offer, and Digital Retail into a unified platform creates synergistic customer benefits Dealers win by leveraging data and a tight integration between wholesale and retail to optimize unit m
Slide 55: CarGurus now serves all aspects of the consumer lifecycle
CarGurus now serves all aspects of the consumer lifecycle 50% of Instant Max customers also look at VDPs. ~20% submit a lead 26% of Digital Deal shoppers submit a credit application Consumers Shop Finance Buy Sell 60% of CG shoppers have a car to sell Digital Deal close rates 2X vs. standard email l
Slide 56: All-in-one destination for consumers
All-in-one destination for consumers Shop Finance Buy Sell what do consumers what from CarGurus? Selection, price Convenience, Trust CarGurus® 56
Slide 57: Providing consumers access to unique inventory while accelerating dealer turn times
Providing consumers with access to unique inventory while accelerating dealer turn times Vehicles purchased by dealers on CarOffer could be automatically listed on CarGurus while still in transit to the buying dealer CONSUMERS Early access to new inventory only on CarGurus.com selection + choice DEA
Slide 58: We empower dealers to source, market and sell
We empower dealers to source, market and sell by linking wholesale and retail in ways no competitor can CG sales team driving 30% of CarOffer new sign-ups Source Sell Market Dealers 1/3 CarOffer buyers using CarGurus IMV in their bidding logic 10k CG dealers using the pricing tool What do dealers wa
Slide 59: TODAY: Integrating wholesale and retail to improve dealer decision making
TODAY: Integrating wholesale and retail to improve dealer decision making Source with more information Dealers can bid in the CarOffer wholesale matrix based upon CarGurus’ IMV Market in new geographies Area Boost allows dealers to reach relevant shoppers outside of their core market Sell with more
Slide 60: LONG-TERM: Optimizing dealer profits through powerful data and insights
LONG-TERM: Optimizing dealer profits through powerful data and insights Source with more information Sourcing Recommendations based on supply, demand and local market trends Market in new geographies Nationwide Marketing Strategies to maximize value of inventory Sell with more options and confidence
Slide 61: Platform synergies benefit our business model
Platform synergies benefit our business model in addition to our value proposition Bundling to drive stickiness with consumers and dealers INSTANT MAX CASH OFFER ACCESS for CO + CG dealers PRICING & PACKAGING INCENTIVES for CO + CG dealers to transact more on CO and buy premium listings tiers CONSUM
Slide 62: Unmatched platform experience for consumers and dealers
CarGurus will provide consumers and dealers with an unmatched platform experience By combining our foundational Listings business with Digital Retail, Wholesale and Instant Max Cash Offer, we create Unparalleled product synergies Unmatched consumer experience Unrivaled dealer value proposition New p
Slide 63: Consumer Marketing Strategy
CarGurus® Consumer Marketing Strategy LED BY | Dafna Sarnoff Chief Marketing Officer
Slide 64: Our marketing approach leverages existing assets
Our marketing approach leverages our existing assets and reflects our expansion into a transaction-enabled platform 1 Leveraging our large consumer audience that trusts and returns to us as we market a transaction-enabled platform 2 Realizing synergies and exploiting our economic advantages in cross
Slide 65: Drawing and re-engaging customers with our site and app
Drawing and re-engaging our customers with our site and our app at increasingly high levels 31M MONTHLY VISITORS1 LARGEST IN MARKET2 50M EMAIL DATABASE 3.5M APP INSTALLS IN 2021 OUR FASTEST GROWING LEAD SOURCE Our traffic leadership, products—that drive ongoing customer engagement, and owned channel
Slide 66: Already realizing the powerful effects of connected businesses
Already realizing the powerful effects of connected businesses ORGANIC TRAFFIC IS THE PRIMARY SOURCE OF INSTANT MAX LEADS OF THOSE WHO SELL WITH US 20% SUBMIT A LEAD TO BUY For every $1 spent on IMCO 15-20 cents is covered by IMCO 20-30 cents is covered by Listing Business For every $1 spent on List
Slide 67: Reaching untapped new customers with brand awareness campaigns
Reaching untapped new customers with upper funnel brand awareness campaigns TODAY, <5% OF IN-MARKET CONSUMERS KNOW US AS A PLACE TO TRANSACT ONLINE1 FOCUS ON REACH NEW INTEGRATED CAMPAIGNS CHANNEL AND MEDIA OPTIMIZATION Drive awareness of CarGurus as the digital destination for the full spectrum of
Slide 68: Strong foundation and expanding assets will drive future profitability and growth
Strong foundation and expanding assets will drive future profitability and growth Organic traffic and owned channels are large and growing Economic efficiencies enable scaling Current success despite limited brand awareness New brand strategy to capture new growth segments Planned marketing efforts
Slide 69: Financial Overview
CarGurus® Financial Overview LED BY | Scot Fredo Chief Financial Officer
Slide 70: Providing value for our investors through our proven financial DNA
Providing value for our investors through our proven financial DNA 1 Financial profile with a strong track record of growth and proven profitability 2 Strategic capital deployment across our business, optimizing our significant free cash flow generation to unlock value for our businesses. 3 We have
Slide 71: CarGurus: driving growth and profitability
CarGurus: driving growth and profitability Strong track record of revenue growth in large total addressable markets Diversified customer base, high quality subscription and transactional revenue Proven operating leverage and profitability Attractive free cash flow generation TOTAL REVENUE & FCF OVER
Slide 72: Understanding our external revenue presentation
Understanding our external revenue presentation... Income Statement Presentation MARKETPLACE Listings Subscription Packages RPM Digital Advertising Suite OEM Advertising Digital Retail: Area Boost, Finance Partnerships, Digital Deal, Other Digital Retail Pilots PRODUCT Instant Max Cash Offer Cost of
Slide 73: Steady growth marketplace provides a profitable foundation
Steady growth marketplace provides a profitable foundatio $317 $454 $589 $551 $637 8% 11% 13% 29% 28% 0% 5% 10% 15% 20% 25% 30% 0100 200 300 400 500 600 700 800 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021U.S. Revenue International Revenue Consolidated Adjusted EBITDA Margin Highly profitable foundationa
Slide 74: CarOffer: driving significant profitable wholesale revenue growth
CarOffer: driving significant profitable wholesale revenue growth Dealer-to-Dealer Revenue Dealer-to-Dealer Non-GAAP Gross Margin1 Instant Max Cash Offer Revenue Instant Max Cash Offer Non-GAAP Gross Margin 1 $ Millions $300 $250 $200 $150 $100 $50 $- 576% REVENUE GROWTH RATE 1Q’21-1Q’22 92% QoQ% RE
Slide 75: CarOffer: efficient operations yield strong revenue and adjusted EBITDA
CarOffer: efficient operations yield strong revenue and adjusted EBITDA results CAROFFER REVENUE & ADJUSTED EBITDA1 CarOffer Revenue CarOffer Adjusted EBITDA1 $ Millions $300 $250 $200 $150 $100 $50 $- $(50) 1,617% YoY % REVENUE GROWTH RATE 1Q’21-1Q’22 10,200% YoY % ADJUSTED EBITDA GROWTH 1Q’21-1Q’2
Slide 76: How does the math work for a typical transaction?
How does the math work for a typical Dealer-to-Dealer and Instant Max Cash Offer transaction? DEALER-TO-DEALER Revenue $1,250 Cost of Sale ($800) Gross Profit per Unit $450 Gross Profit Margin per Unit 36.0% INSTANT MAX CASH OFFER Revenue $27,000 Cost of Sale ($26,000) Gross Profit per Unit $1,000 G
Slide 77: CarOffer is gaining significant scale quickly
While maintaining profitability, CarOffer is gaining significant scale quickly TOTAL TRANSACTIONS1 D2D Instant Max Cash Offer # UNITS 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 12,013 1Q’21 36,920 2Q’21 240 35,514 3Q’21 3,015 68,092 4Q’21 6,553 62,934 1Q’22 GROSS MERCHANDISE SALES (GM
Slide 78: Significant free cash flow to support high growth initiatives
Significant free cash flow to support high growth initiatives NON-GAAP FREE CASH FLOW EVOLUTION1 $ Millions $160 $140 $120 $100 $80 $60 $40 $20 $0 $12.8 FY 2016 $18.3 FY 2017 $44.2 FY 2018 $55.9 FY 2019 $149.2 FY 2020 Pro Forma $154.4M1 $84.4 FY 2021 2021 CarOffer Transaction2 $70M Cash $104M Stock
Slide 79: Top three key investment areas
Top three key investment areas Hiring and Developing TALENT Headcount 827 in 2020 1,203 in 2021 in 2022 Investing in Cutting-Edge TECHNOLOGY Technology Spend $86M in 2020 $106M in 2021 in 2022 Driving Growth and Awareness SALES & MARKETING Sales & Marketing Spend $257M in 2020 $291M in 2021 in 2022
Slide 80: Capital efficient approach to reach our long-term targets
Capital efficient approach to reach our long-term targets FY 2021 Non-GAAP Gross Margins1 1Q’22 Non-GAAP Gross Margins1 Long-Term Non-GAAP Gross Margin Target3 Long-Term Adjusted EBITDA Margin Target3 MARKETPLACE2 93% 92% 90-93% 30-35% INSTANT MAX CASH OFFER 4% 3% 5-6% 2-3% DEALER-TO-DEALER 38% 30%
Slide 81: Q2 Guidance: updated
Q2 Guidance: updated $ in Millions (*except Non-GAAP EPS) 1Q’2022 2Q’2022 – Original Guidance (5/9/22)1 2Q’2022 - Updated Guidance (5/25/22) Revenue $431 $480 - $510 $490 - $520 IMCO Revenue $162 $219 - $239 $227 - $247 Non–GAAP Operating Income $62 $44 - $52 $48 - $56 Consolidated Adjusted EBITDA $
Slide 82: Closing Remarks
CarGurus® Closing Remarks LED BY | Jason Trevisan Chief Executive Officer
Slide 83: Recap of the day
CC® Recap of the day EVOLVING TO MEET NEEDS Dealers Source efficiently High ROI marketing Compete digitally Consumers Customizable, trusted, and transparent one-stop shop REALIZING SYNERGIES Combining businesses to create unmatched marketplace experience Listings Digital Retail Digital Wholesale Ins
Slide 84: The resulting financial profile is compelling... and scarce
The resulting financial profile is compelling... and scarce TECHNOLOGY SCALE PROFIT GROWTH RUNWAY U.S PUBLIC TECH COMPANIES $3B+ MARKET CAP PROFITABLE IN 2021 GREW 40% IN 2021 40% CONSENSUS GROWTH NTM 5,146 476 387 46 9 Sourced from CapIQ Public Data. We searched the following criteria as of May 12,
Slide 85: Minute Break
CarGurus® 5 Minute Break 85
Slide 86: Question & Answer Panel
CarGurus® Question & Answer Panel 86
Slide 87: Question & Answer Panel
Question & Answer Panel Jason Trevisan Chief Executive Officer Scot Fredo Chief Financial Officer Sam Zales President & Chief Operating Officer Dafna Sarnoff Chief Marketing Officer Tom Caputo Chief Product Officer Spencer Scott EVP, North American Sales and Service Brad Rosenfeld EVP, Digital Retai
Slide 88: Thank You!
CarGurus® Thank You!
Slide 89: Appendix
CarGurus® Appendix
Slide 90: Definitions
Definitions CARGURUS PAYING DEALERS CARGURUS FREEMIUM DEALERS CAROFFER ENROLLED DEALERS CAROFFER DEALER-TO-DELAER TRANSACTIONS INSTANT MAX CASH OFFER TRANSACTIONS CAROFFER TOTAL TRANSACTIONS CAROFFER GROSS MERCHANDISE SALES (“GMS”) A dealer account with an active, paid marketplace subscription at th
Slide 91: Definitions
Definitions CAROFFER AVERAGE TRANSACTIONS PER DEALER (PURCHASES AND SALES) QUARTERLY AVERAGE REVENUE PER SUBSCRIBING DEALER (“QARSD”) AVERAGE MONTHLY SESSIONS AVERAGE MONTHLY UNIQUE USERS The number of CarOffer Total Transactions during the specified time period, divided by the total number of parti
Slide 92: Reconciliations of Dealer-to-Dealer non-GAAP gross profit margin
Reconciliations of Dealer-to-Dealer non-GAAP gross profit margin CarOffer Dealer-to-Dealer Business ($ millions) 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 GAAP REVENUE $15.6 $57.3 $57.7 $94.3 $224.9 $105.5 GAAP COST OF REVENUE $13.1 $39.0 $42.5 $65.5 $160.1 $78.9 GAAP GROSS PROFIT $2.5 $18.3 $
Slide 93: Reconciliations of Instant Max Cash Offer non-GAAP gross profit margin
Reconciliations of Instant Max Cash Offer non-GAAP gross profit margin Instant Max Cash Offer Business ($ millions) 3Q 2021 4Q 2021 FY 2021 1Q 2022 GAAP REVENUE $5.0 $84.2 $89.2 $161.8 GAAP COST OF REVENUE $4.75 $80.4 $85.2 $157.2 GAAP GROSS PROFIT $0.25 $3.8 $4.0 $4.6 IMPACT OF AMORTIZATION OF INTA
Slide 94: Reconciliations of total CarOffer non-GAAP gross profit and margin
Reconciliations of total CarOffer non-GAAP gross profit and non-GAAP gross profit margin Total CarOffer Business ($ millions) 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 GAAP REVENUE $15.6 $57.3 $62.7 $178.5 $314.1 $267.3 GAAP COST OF REVENUE $13.1 $39.0 $48.1 $145.8 $245.9 $236.1 GAAP GROSS PRO
Slide 95: Reconciliations of full-year 2021 non-GAAP gross profit margins
Reconciliations of full-year 2021 marketplace, wholesale, product, & consolidated non-GAAP gross profit margins ($ millions) FY 2021 Marketplace FY 2021 Wholesale FY 2021 Product FY 2021 Consolidated GAAP REVENUE $636.9 $195.1 $119.3 $951.4 GAAP COST OF REVENUE $47.7 $127.7 $118.6 $294.0 GAAP GROSS
Slide 96: Reconciliations of 1Q 2022 non-GAAP gross profit margins
Reconciliations of 1Q 2022 marketplace, wholesale, product, & consolidated non-GAAP gross profit margins 1Q 2022 1Q 2022 1Q 2022 Wholesale 1Q 2022 Product Marketplace Consolidated ($ millions) GAAP REVENUE $163.3 $91.0 $176.3 $430.6 GAAP COST OF REVENUE $12.2 $58.2 $178.3 $248.7 GAAP GROSS PROFIT $1
Slide 97: Reconciliations of consolidated adjusted EBITDA and margin
Reconciliations of consolidated adjusted EBITDA, adjusted EBITDA, consolidated adjusted EBITDA margin, and adjusted EBITDA margin ($ millions) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 1Q’22 CONSOLIDATED NET INCOME $13.2 $65.2 $42.1 $77.6 $110.4 $18.8 DEPRECIATION AND AMORTIZATION $3.8 $5.0 $7.8 $10.2
Slide 98: Reconciliation of 1Q'22 non-GAAP operating income and margin
Reconciliation of 1Q’22 non-GAAP operating income and non-GAAP operating margin ($ millions) 1Q’22 GAAP OPERATING INCOME $26.7 AMORTIZATION OF INTANGIBLE ASSETS $7.7 STOCK-BASED COMPENSATION $27.8 ACQUISITION-RELATED EXPENSES $- NON-GAAP OPERATING INCOME $62.2 GAAP OPERATING MARGIN 6% NON-GAAP OPERA
Slide 99: Reconciliation of 1Q'22 non-GAAP net income and diluted EPS
Reconciliation of 1Q’22 non-GAAP net income and non-GAAP diluted EPS ($ millions) 1Q’22 GAAP CONSOLIDATED NET INCOME $18.8 STOCK-BASED COMPENSATION EXPENSE, NET OF TAX1 $22.0 CHANGE IN TAX PROVISION FROM STOCK-BASED COMPENSATION EXPENSE2 $0.3 AMORTIZATION OF INTANGIBLE ASSETS $7.7 NON-GAAP CONSOLIDA
Slide 100: Reconciliation of CarOffer adjusted EBITDA
Reconciliation of CarOffer adjusted EBITDA ($ millions) 1Q’21 2Q’21 3Q’21 4Q’21 FY 2021 1Q’22 GAAP CAROFFER NET (LOSS) INCOME1 ($7.5) ($1.7) $0.2 $11.9 $2.9 ($2.8) IMPACT OF CAROFFER DEPRECIATION AND AMORTIZATION $6.1 $7.3 $7.4 $7.6 $28.4 $7.6 IMPACT OF CAROFFER STOCK-BASED COMPENSATION $1.2 $7.1 $1
Slide 101: Reconciliation of free cash flow and pro forma free cash flow
Reconciliation of free cash flow and pro forma free cash flow ($ millions) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 GAAP NET CASH AND CASH EQUIVALENTS PROVIDED BY OPERATING ACTIVITIES $20.0 $25.7 $51.7 $70.1 $156.7 $98.3 PURCHASES OF PROPERTY AND EQUIPMENT ($5.8) ($5.2) ($6.0) ($11.2) ($2.9)
Slide 102: Reconciliation of FY 2020 revenue to non-GAAP, pro forma revenue
Reconciliation of FY 2020 revenue to non-GAAP, pro forma revenue ($ millions) FY 2020 TOTAL GAAP REVENUE $551.5 IMPACT OF FEE REDUCTIONS ON U.S. MARKETPLACE $44.0 IMPACT OF FEE REDUCTIONS ON INT’L MARKETPLACE $2.7 TOTAL NON-GAAP PRO FORMA REVENUE $598.2 Note: We define total FY 2020 non-GAAP, pro fo