CarGurus Inc (CARG) Reports Mixed Q4 and Full-Year 2023 Results Amid Market Challenges
Marketplace Revenue Growth: Accelerated to 10% year-over-year in Q4, the fastest in 10 quarters.
Consolidated Net Loss: Increased to $(22.6) million in Q4, down 197% year-over-year.
Adjusted EBITDA: Improved significantly with a 120% year-over-year increase in Q4.
Share Repurchase: CarGurus repurchased $99.9 million worth of shares in Q4 and $204.1 million in FY 2023.
Operational Metrics: U.S. Paying Dealers and International Paying Dealers both saw a slight decline.
Guidance for Q1 2024: Total revenue projected to be between $201 million and $221 million.
On February 26, 2024, CarGurus Inc (NASDAQ:CARG), the leading online automotive marketplace, announced its financial results for the fourth quarter and full year ended December 31, 2023, through its 8-K filing. The company reported a notable acceleration in Marketplace Revenue, growing by 10% year-over-year in Q4, marking the fastest growth rate in nearly three years. However, the company also experienced a significant consolidated net loss of $(22.6) million, a 197% decrease compared to the same period last year. Despite this, CarGurus achieved a 120% increase in non-GAAP Consolidated Adjusted EBITDA, reaching $61.2 million in Q4.
CarGurus operates as an online automotive marketplace connecting buyers and sellers of new and used cars. The company offers a variety of listing products and advertising opportunities, targeting consumers based on specific criteria such as make, model, and zip code. The majority of CarGurus' revenue is generated in the United States, with operations also extending internationally.
CarGurus' CEO, Jason Trevisan, expressed satisfaction with the company's performance, highlighting the growth of the Marketplace business and the acquisition of CarOffer, which expanded CarGurus' reach into the digital wholesale sector. The company plans to continue investing in growth initiatives while maintaining financial discipline and operational excellence.
Financial Performance Analysis
The company's financial achievements, including the share repurchase program, reflect a commitment to returning value to shareholders and confidence in the company's future prospects. The increase in Adjusted EBITDA suggests improved operational efficiency and cost management, which are crucial in the competitive Vehicles & Parts industry.
Key financial metrics from the income statement, balance sheet, and cash flow statement indicate mixed results. While Marketplace Revenue showed growth, Wholesale Revenue and Product Revenue experienced declines of 7% and 81%, respectively, year-over-year in Q4. Total revenue for the year decreased by 45%, and the company's cash, cash equivalents, and short-term investments at the end of the period were down by 34%.
Operational challenges included a slight decrease in both U.S. and International Paying Dealers, and a 26% decrease in Transactions in Q4. However, the company saw growth in U.S. Average Monthly Unique Users and Sessions, indicating a strong consumer base and engagement on the platform.
CarGurus' guidance for the first quarter of 2024 anticipates total revenue between $201 million and $221 million, with Marketplace revenue projected at $182 million to $187 million. The company expects non-GAAP Consolidated Adjusted EBITDA to be between $41 million and $49 million, with non-GAAP EPS ranging from $0.24 to $0.29.
The company's earnings report and future guidance provide valuable insights for investors, particularly those interested in the automotive and digital marketplace sectors. CarGurus' strategic investments and operational adjustments in response to market conditions will be key factors to watch in the coming quarters.
For a more detailed analysis and to stay updated on CarGurus Inc (NASDAQ:CARG)'s financial performance, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from CarGurus Inc for further details.
This article first appeared on GuruFocus.
