Q4 2023 CarGurus Inc Earnings Call

Greetings and welcome to car gross fourth quarter and full year 2023 earnings results conference. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Operator: Greetings and welcome to CarGurus's 4th Quarter and Full Year 2023 Earnings Results Conference. At this time, all participants are in a listen-only mode.

Operator: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Karndeep Singh, Head of Investor Relations. Thank you, Kirndeep.

Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad as.

As a reminder, this conference is being recorded.

Speaker Change: It is now my pleasure to introduce you to your host Craig Deep Sea head of Investor Relations. Thank.

Thank you you may begin.

Operator: You may begin. Thank you, operator. Good afternoon.

Speaker Change: Thank you operator, good afternoon I'm delighted to welcome you to car grew its fourth quarter and full year 2023 earnings call.

Karndeep Singh: I'm delighted to welcome you to CarGurus' fourth quarter and full year 2023 earnings call. With me on the call today are Jason Trevisan, Chief Executive Officer; Sam Zales, President and Chief Operating Officer; and Elisa Palazzo, Chief Financial Officer. During the call, we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those reflected in such statements. Information concerning those risks and uncertainties is discussed in our SEC filings, which can be found on the SEC's website and in the Investor Relations section of our website. We undertake no obligation to update or revise forward-looking statements, except as required by law.

Speaker Change: On the call today are Jason kind of thing Chief Executive Officer, Danville, President and Chief operating Officer, and Elisa awful lot Bell Chief Financial Officer.

Speaker Change: During the call it will be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in such statements.

Speaker Change: Information concerning those risks and uncertainties as discussed in our SEC filings, which can be found on the sec's website and in the Investor Relations section on our website.

Speaker Change: We undertake no obligation to update or revise forward looking statements, except as required by law.

Karndeep Singh: Furthermore, during the course of our call today, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to comparable non-GAAP measures is included in our press release issued today, as well as in our updated investor presentation, which can be found in the investor relations section of our website. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency as it relates to metrics used by our management in their financial and operational decision making. With that, I'll now turn the call over to Jason.

Speaker Change: During the course of our call today will refer to certain non-GAAP financial measures.

Speaker Change: A reconciliation of GAAP to comparable non-GAAP measures is included in our press release issued today as well as in our updated investor presentation, which can be found on the Investor Relations section of our website.

Speaker Change: We believe that these non-GAAP financial measures provide useful information about our operating results and enhance the overall understanding of past financial performance and future prospects and allow for greater transparency as it relates to metric used by our management and their financial and operational decision, making with that I'll now turn the call over to Dave.

Speaker Change: Yeah.

Dave: Thank you Karen and thank you to all those joining us today.

Jason Trevisan: Thank you, Kirndeep, and thank you to all those joining us today. As I shared at the beginning of last year, the theme of 2023 was monetization across our platform, and I'm pleased to report that we delivered outstanding results. Throughout the year, we expanded our product offering to enrich our value proposition and meet dealers and consumers' evolving needs. This further strengthened our partnership with dealers and drove accelerating revenue growth in our foundational listings. While smaller in size, the international operations also contributed to the strength of our results.

Dave: As I shared at the beginning of last year. The theme of 2023 was monetization across our platform and I'm pleased to report that we delivered outstanding results.

Dave: The year, we expanded our product offering to enrich our value proposition and the dealers and consumers evolving needs.

Dave: Further strengthened our partnership with dealers and drove accelerating revenue growth in our foundational listings business.

Dave: While smaller in size International operations also contributed to the strength of our results.

Jason Trevisan: Revenue growth accelerated in Canada, and we achieved profitability in the U.K., marking a significant milestone for CarGurus, achieving profitability in every market. In December, we completed the acquisition of CarOffer, which will allow us to accelerate the connectivity between our retail and wholesale product offers. This acquisition, coupled with our digital retail efforts, has expanded and diversified the range of monetizable transaction activities that holistically serve our dealer partners. Collectively, we believe that the expansion of product offerings, ongoing innovation, and data-driven insights fortify our ability to attract new dealer customers, increase the wallet share of the existing customer base, and progress toward our ultimate vision of an end-to-end transaction-enabled platform. As a result of our tremendous progress, I'm pleased to share that we ended the year exceeding our forecasted EBITDA guidance for the fourth quarter.

Dave: Revenue growth accelerated in Canada, we achieved profitability in the U K, marking a significant milestone for cargo routes achieving profitability in every market.

Dave: In December we completed the acquisition of car offer which will allow us to accelerate the connectivity between our retail and wholesale product offerings.

Dave: This acquisition, coupled with our digital retail efforts has expanded and diversified the range or monetize the bold transaction activities that holistically serve our dealer partners.

Dave: Collectively we believe that the expansion of product offerings ongoing innovation and data driven insights fortify our ability to attract new dealer customers increase the wallet share of the existing customer base and progress toward our ultimate vision of an end to end transaction enabled platform.

As a result of our tremendous progress I'm pleased to share that we ended the year exceeding our forecasted EBITDA guidance for the fourth quarter.

Dave: In 2023 marketplace business significantly outperformed our expectations exiting the year with approximately 10% revenue growth and meaningfully contributing to our EBITDA beat.

Jason Trevisan: In 2023, the marketplace business significantly outperformed our expectations, exiting the year with approximately 10% revenue growth and meaningfully contributing to our EBITDA. In a challenging environment for our customers characterized by weak consumer demand, lack of affordability, and heightened expenses linked to floor plan financing, our foundational listings business exhibited remarkable resiliency, pricing power, and growth acceleration. In fact, we ended the year growing U.S. CARCID approximately 12% $6,532.

Dave: In a challenging environment for our customers characterized by weak consumer demand lack of affordability and heightened expenses linked to floor plan financing.

Dave: Foundational listings business exhibited remarkable resiliency pricing power and growth acceleration.

Dave: In fact, we ended the year growing U S cars at approximately 12% year over year.

Dave: $6532.

Jason Trevisan: This is our strongest year-over-year growth on record since introducing CARCID as a KPI, excluding pandemic-related concessions, and marks the 13th consecutive quarter of revenue. In the fourth quarter, the largest drivers of CarSid growth came from adding on new dealers at market rates, package upgrades, and price. We also experienced robust adoption of add-on products, and multi-product attach rates increased by 36% year-over-year, as dealers continue to look for additional channels to attract high-intent, ready-to-purchase shoppers to their inventory. By providing dealers with greater value in our product offerings and simultaneously growing leads per paying dealer year over year, in Q4, we experienced the strongest MRR acquisition in 10 quarters. Evaluating the Marketplace Strategy for 2024 Our approach consists of two key aspects.

Dave: This is our strongest year over year growth on record since introducing car sit as the API, excluding pandemic related concessions and marks the 13th consecutive quarter of increase.

Dave: In the fourth quarter, the largest drivers of cars had growth came from adding on new dealers at market rates package upgrades and price increases.

Dave: We also experienced robust adoption of add on products and multi product attach rates increased by 36% year over year as dealers continue to look for additional channels to attract high intent ready to purchase shoppers to their inventory.

Dave: By providing dealers with greater value in our product offerings and simultaneously growing leads per paying dealer year over year in Q4, we experienced the strongest MRO acquisition in 10 quarters.

Dave: Evaluating the marketplace strategy for 2024, our approach consists of two key aspects.

Jason Trevisan: As we highlighted on the last earnings call, our number one priority is optimizing all drivers of cars. This commitment includes adding new dealers at market rates. Expansion of existing dealer wallet share through listings, upgrades, product innovation and adoption, and lead quantity and quality. This commitment will allow us to deepen the value we provide our dealers and drive increased monetization. Secondly, our renewal strategy involves evaluating dealers and executing renewals to align terms with the ROI we provide.

Dave: As we highlighted on the last earnings call. Our number one priority is optimizing all drivers of carpet.

Dave: This commitment includes adding new dealers at market rates expansion of existing dealer wallet share through listings upgrades product innovation and adoption and lead quantity and quality.

Dave: This commitment will allow us to deepen the value, we provide our dealers and drive increased monetization.

Dave: Secondly, our renewal strategy involves evaluating dealers and executing renewals to align terms with the ROI we provide.

Jason Trevisan: Simultaneously, exploring new product cross-sell and up-sell opportunities as we enhance the value proposition of our premium package. For underpriced dealers that fall below market rates, we will conduct ABRs leveraging their proven success in 2023 as dealers recognize the ROI of our platform. Throughout 2023 and carrying forward into 2024, we have invested in our CARCID lever of product innovation, aimed at fostering enhanced value creation and strengthening dealer engagement throughout our platform. This commitment to innovation involves leveraging the power of artificial intelligence and data insights to elevate our platform and introducing new products to further enhance the ROI for our customers. Our strategic emphasis on AI centers around three key areas.

Dave: Simultaneously exploring new product cross sell and up sell opportunities as we enhance the value proposition of our premium packages.

Dave: We're underpriced dealers that fall below market rates, we will conduct a be ours leveraging their proven success in 2000 and twenty-three as dealers recognize the ROI of our platform.

Throughout 2023 and carrying forward into 2024, we have invested in our cars did lever of product innovation aimed at fostering enhanced value creation and strengthening dealer engagement throughout our platform.

Dave: This commitment to innovation involves leveraging the power of artificial intelligence and data insights to elevate our platform and introducing new products to further enhance the ROI for our customers.

Dave: Our strategic emphasis on AI centers around three key areas internal platform efficiencies elevating the consumer experience and delivering actionable insights for our dealers.

Jason Trevisan: Internal Platform Efficiencies, Elevating the Consumer Experience, and delivering actionable insights for our customers. In relation to the first two key areas, our latest development is a listing content generator. This tool produces an easily digestible list of vehicle features and streamlines the consumer experience by making it easier to locate keywords and features of relevance during the vehicle shopping journey. As for greater data insights, we continue to focus on our dealer data insights. Last October, we released Next Best Deal Rating, a powerful report that helps dealers understand the least amount of price reduction needed to achieve the next best deal rating on cart. Since launching in October, we have already signed up over 10% of our dealers for daily or weekly reports to support their price analysis to improve VDP views and inventory turnover. In under three months, over 100,000 price adjustments were made as a result of the insights provided by NextBestDeal.

Dave: In relation to the first two key areas our latest development as the listings content generator.

Dave: This tool produces an easily digestible list of vehicle features and streamlines the consumer experience by making it easier to locate keywords and features of relevance drain the vehicle shopping journey.

Dave: As for greater data insights, we continue to focus on our dealer data insights initiative.

Dave: Last October we released next best deal rating powerful report that helps dealers understand the least amount of price reduction needed to achieve the next best deal rating on Carters.

Dave: Since launching in October we have already signed up over 10% of our dealers for daily or weekly reports to support their price analysis to improve V. D P views and inventory turn times.

Dave: In under three months over 100000 price adjustments were made as a result of the insights provided by next best deal ready.

Dave: We've also developed yet another powerful tool that recommends inventory based on a dealers turn time objectives.

Jason Trevisan: We've also developed yet another powerful tool that recommends inventory based on a dealer's turn time objective. This early access tool allows each dealer to set a specific turn time goal, and we utilize the CarGurus listing scale to analyze turn time trends at a detailed level in local and adjacent markets. Additionally, we will leverage CarGurus site data to examine consumer trends or see changes in preferences as we look ahead. By combining consumer and inventory data, we generate personalized reports for dealers. Predicting vehicles that align with their turn time objectives.

Dave: This early access tool allows each dealer to set a specific turn time goal and we utilize the cargo is lifting scale to analyze turn time trends at a detailed level and local and adjacent markets.

Dave: Additionally, we will leverage cargo as site data to examine consumer trends, we're seeing changes in preferences as we look ahead.

Dave: By combining consumer and inventory data, we generate personalized reports for dealers predicting vehicles that align with their turn time objectives.

Jason Trevisan: Our aim is for dealers to integrate these insights into their wholesale strategy. Optimizing operations and achieving their goals while fostering synergies with our car offer wholesale. As we develop an end-to-end, transaction-enabled platform, we're a leading provider of real-time retail and wholesale data, empowering dealers with decision making and helping them run smarter. As we merge retail with wholesale from a product development perspective, we're able to offer dealers even more ways to access consumer inventory and give consumers even more choice in how they sell their cars. Sell My Car presents consumers with two types of offers. 100% online offers, as well as offers from local dealers known as top dealer offers.

Dave: Our aim is for dealers to integrate these insights into their wholesale strategies optimizing operations and achieving their goals, while fostering synergies with our car off our wholesale business.

Dave: As we develop an end to end transaction enabled platform, we're a leading provider of real time retail and wholesale insights empowering dealer's decision, making and helping them run smarter business.

As we merge retail with wholesale from a product development perspective, we're able to offer dealers, even more ways to access consumer inventory and give consumers even more choice in how they sell their vehicles.

Dave: Sell my car presents consumers with two types of offers a 100% online offer as well as offers from local dealers known as top dealer offers.

Dave: Since launching pop dealer offers we've seen conversion rates more than double as consumers value the ability to choose how they sell their vehicle.

Jason Trevisan: Since launching Top Dealer Offers, we have seen conversion rates more than double as consumers value the ability to choose how they sell their While we have achieved remarkably high seller net promoter scores, we aim to uphold the quality of the offering as it is. To achieve this, we are testing with select dealers an intake tool designed to establish trust between consumers and dealers, while providing us with a valuable feedback loop of real-time insights for each transaction. The goal is to further scale Top Dealer Offers in 2024. And as an added benefit, Top Dealer Offers is powered by CarOffers Matrix technology.

Dave: The primary focus during this early access phase is to guarantee an outstanding customer experience, while also catering to the needs of our dealer partners.

Dave: While we have achieved remarkably high seller net promoter scores, we aimed to uphold the quality of the offering as it expands to achieve this we are testing with select dealers and intake tool designed to establish trust between consumers and dealers, while providing us with valuable feedback loop of real time insights for each transaction.

The goal is to further scale top dealer offers in 2024 and as an added benefit popular offers is powered by car offers matrix technology, creating inherent synergies by introducing cargo whose dealers to the car off our wholesale platform.

Dave: In 2021, we chose to acquire a stake in car offer as it stood as a unique offering enabling dealers to efficiently buy and sell wholesale inventory programmatically.

Dave: This decision was driven by our vision to build a distinctive end to end wholesale to retail transaction enabled platform that is unavailable elsewhere.

Jason Trevisan: Creating inherent synergies by introducing CarGurus dealers to the CarOffer wholesale platform. In 2021, we chose to acquire a stake in CarOffer as it stood as a unique offering, enabling dealers to efficiently buy and sell wholesale inventory programmatically. This decision was driven by our vision to build a distinctive, end-to-end, wholesale-to-retail, transaction-enabled platform that is unavailable elsewhere. Our enthusiasm for this opportunity is greater than ever since accelerating the acquisition and appointing Zach Halliwell as president.

Dave: Our enthusiasm for this opportunity is greater than ever since accelerating the acquisition and appointing Zach Hollowell CEO.

Dave: Our platform is ideal for large players who continue to find programmatic buying to be an efficient and effective way to source and sell inventory.

Dave: In 2024, our primary focus lies and refining the product capabilities advancing the car off our technology to predictive analytics, and incorporating cargo, whose consumer and retail data to further differentiate our platform.

Dave: Fight the tremendous advancements in car offers operational efficiency over the past year, particularly in mechanical inspections title transfers in transportation.

Jason Trevisan: Our platform is ideal for large players who continue to find programmatic buying to be an efficient and effective way to source and sell. In 2024, our primary focus lies in refining the product capabilities, advancing the CarOffer technology through predictive analytics, and incorporating CarGurus consumer and retail data to further differentiate our platform. Despite the tremendous advancements in car offering operational efficiency over the past year, particularly in mechanical inspections, title transfers, and transportation, we will look to enhance our capabilities even further to optimize the dealer experience and drive cost. We plan to use the next few quarters to drive our strategic and operational initiatives while applying financial discipline to strengthen our business, and it may take several quarters before the business returns to profitable growth. Similar to advancing our digital wholesale capabilities, we have also been investing strategically in building our digital retail platform, where our products allow dealers to serve a broad array of consumers with varying degrees of readiness to purchase a car. Since beginning our journey, we have developed two product options. The first is digital.

Dave: We will look to enhance our capabilities, even further to optimize the dealer experience and drive cost efficiencies.

Dave: We plan to use the next few quarters to drive our strategic operational initiatives, while applying financial discipline to strengthen our business and it may take several quarters before the business returns to profitable growth.

Dave: Similar to advancing our digital wholesale capabilities. We have also been investing strategically in building our digital retail platform.

Dave: Where our products allow dealers to serve a broad array of consumers with varying degrees of readiness to purchase their cars.

Dave: Since beginning our journey, we've developed two product offerings. The first is digital deal.

Dave: As of year end, we had 4667 dealers on digital deal growing approximately 200% year over year and nearly doubling our digitally enabled vehicle listings to approximately 400000.

Dave: Component of the accelerated sequential growth is the unique bundling and packaging opportunities we have created with the two highest lifting tiers.

Dave: As of October dealers upgrading to the future plus our featured priority plus listings tears received digital deal included in their package.

Dave: Another product that has performed well from a bundling and packaging standpoint, as digital deal with geographic expansion.

Dave: Since bundling digital deal in geographic expansion, we have seen in approximately 30% increase in adoption year over year.

Jason Trevisan: As of year-end, we had 4,667 dealers on Digital Deal, growing approximately 200% year-over-year and nearly doubling our digitally-enabled vehicle listings to approximately 400,000. A component of the accelerated sequential growth is the unique bundling and packaging opportunities we have created with the two highest. As of October, dealers upgrading to the Featured Plus or Featured Priority Plus listings tiers receive Digital Deal included in their package. Another product that has performed well from a bundling and packaging standpoint is Digital Deal with Geographic Expansion.

Dave: With more digitally enabled listings available than any other online retailer, we are providing consumers with a convenient self selective purchasing journey.

Dave: All while providing trust transparency and the best pricing from the largest selection of inventory among major online automotive marketplaces in the U S.

Dave: As consumers look to do more of the shopping journey at home. We are seeing digitally enabled leads continue to increase as a percentage of a dealer's overall leads.

Dave: Digital deal leads now account for 20% of a dealer's email leads or 30% for top performing dealers and are up to five times more likely to close in traditional email leads.

Jason Trevisan: Since bundling Digital Deal and Geographic Expansion, we have seen an approximately 30% increase in adoption year-over-year, With more digitally-enabled listings available than any other online retailer, we are providing consumers with a convenient, self-selective purchasing journey, all while providing trust, transparency, and the best pricing from the largest selection of inventory among major online automotive marketplaces in the U.S. As consumers look to do more of the shopping journey at home, we are seeing digitally enabled leads continue to increase as a percentage of a dealer's overall lead, digital deal leads now account for 20% of a dealer's email or 30% for top performing dealers and are up to five times more likely to close than traditional, Our second offering in digital retail further advances our digitally native transaction capabilities and is formally known as CGBuyOnline. This pilot is an asset-light, end-to-end solution that empowers dealers to sell cars to out-of-market shoppers entirely online and boost online sales by providing dealers with the marketing, technology, and logistics needed to support these transactions.

Dave: Our second offering in digital retail further advances our digitally native transaction capabilities and as formerly known as C. G by online.

Dave: This pilot is an asset light end to end solution that empowers dealers to sell cars to out of market shoppers entirely online and boost online sales by providing dealers with the marketing technology and logistics needed to support these transactions.

Dave: We are currently live with a small subset of dealers and our goal in 2020 for us to collaborate closely with pilot dealers further validating the product market fit and developing an outstanding experience for both consumers and dealers alike.

Dave: Through our digital retail initiatives, we aim to equip dealerships with a broad range of tools and capabilities, enabling them to effectively compete and streamlined vehicle sales to digitally savvy are out of market shoppers.

Dave: In a landscape where consumers increasingly opt for online channels in their car buying and selling journey, it's essential to convey to shoppers that our platform is specifically designed to meet their needs, giving them the flexibility to handle as much or as little as they prefer online.

Jason Trevisan: We are currently live with a small subset of dealers, and our goal in 2024 is to collaborate closely with pilot dealers, further validating the product market fit, and developing an outstanding experience for both consumers and dealers alike. Through our digital retail initiatives, we aim to equip dealerships with a broad range of tools and capabilities, enabling them to effectively compete and streamline vehicle sales to digitally savvy or out-of-market shops. In a landscape where consumers increasingly opt for online channels in their car buying and selling journey, it's essential to convey to shoppers that our platform is specifically designed to meet their needs, giving them the flexibility to handle as much or as little as they prefer online. As we progress further down the sales funnel and guide consumers toward completing transactions entirely online, a task that requires a considerable amount of trust when sharing sensitive personal information.

Dave: As we progress further down the sales funnel and guide consumers towards completing transactions entirely online.

Dave: A task that requires a considerable amount of trust when sharing sensitive personal information.

Dave: It becomes crucial to amplify our brand awareness.

Dave: Pursuit of this objective we kicked off an extension of our 2023 campaign called your car, Norway in January spotlighting, the gratifying experience of everything falling into place just as desired.

Dave: As we persist in our efforts to drive direct and owned channel traffic.

Dave: The strong emphasis on enhancing brand awareness.

Dave: Notably cargoes ended 2023 is the number one automotive app in terms of downloads on both iOS and Android with an average rating of four eight stars.

Dave: This achievement represents a significant milestone for us considering that our app plays a crucial role as a source of organic traffic that converts at a higher rate than traditional leads.

Dave: Our app accounted for a quarter of leads in 2023 growing from only 10% in 2020.

Dave: As we drive more organic traffic and amplify our brand we are building a platform that creates consumer loyalty.

Dave: In 2023, our accomplishments strengthened our market and product leadership.

Jason Trevisan: It has become crucial to amplify our brand awareness. In pursuit of this objective, we kicked off an extension of our 2023 campaign called Your Car, Your Way in January, spotlighting the gratifying experience of everything falling into place just as desired. As we persist in our efforts to drive direct and owned channel traffic, we place a strong emphasis on enhancing brand awareness. Notably, CarGurus ended 2023 as the number one automotive app in terms of downloads on both iOS and Android, with an average rating of 4.8 stars.

Dave: The accelerated revenue growth and drove significant progress toward our vision of being the only end to end automotive transaction enabled platform, where dealers can source market and sell and consumers can shop finance buy and sell vehicles.

Dave: Looking ahead to 2024, we expect to further build on this momentum.

Dave: We're very excited about our areas of opportunity, including capturing more value in the marketplace business integrating and expanding car offer while increasing our share of the growing digital wholesale market.

Jason Trevisan: This achievement represents a significant milestone for us, considering that our apps play a crucial role as a source of organic traffic that converts at a higher rate than traditional. Our app accounted for a quarter of leads in 2023, growing from only 10% in 2020. As we drive more organic traffic and amplify our brand, we are building a platform that creates consumer loyalty. In 2023, our accomplishments strengthened our market and product leadership, re-accelerated revenue growth, and drove significant progress toward our vision of being the only end-to-end automotive transaction-enabled platform where dealers can source, market, and sell, and consumers can shop, finance, buy, and sell vehicles. Looking ahead to 2024, we expect a further build on this moment.

Dave: And continuing to invest in innovative growth initiatives, such as digital retail.

Dave: Through it all we plan to offer our dealer customers, even greater insights and value by linking the wholesale and retail process together in one seamless platform.

Dave: While we will continue to invest in our business, we do so by maintaining financial discipline, and prioritizing operational excellence and efficient capital allocation.

Dave: We believe this will allow us to enhance our profitability and create shareholder value as we continue to expand in both existing and new growth opportunities for.

Dave: We're very pleased with our 2023 accomplishments and financial results, we look forward to accelerating our momentum in 2024.

Dave: Now, let me turn it over to Lisa to discuss our financial results.

Lisa: Thank you, Jason and good afternoon, everyone.

Lisa: Before I dive into the fourth quarter results I would like to express my excitement about joining card correct.

Elisa Palazzo: We're very excited about our areas of opportunity, including capturing more value in the marketplace, integrating and expanding the car offer while increasing our share of the growing digital wholesale market, and continuing to invest in innovative growth initiatives such as digital retail. Through it all, we plan to offer our dealer customers even greater insights and value by linking the wholesale and retail processes together in one seamless platform. While we will continue to invest in our business, we do so by maintaining financial discipline and prioritizing operational excellence and efficient capital allocation. We believe this will allow us to enhance our profitability and create shareholder value as we continue to expand in both existing and new growth opportunities. We're very pleased with our 2023 accomplishments and financial results. We look forward to accelerating our momentum in 2024. Now, let me turn it over to Aliza to discuss our financial performance. Thank you, Jason, and good afternoon, everyone. Before I dive into the fourth quarter results, I would like to express my excitement about joining CarGurus.

Our marketplace business is a unique asset with the largest network of dealers.

Lisa: And the broadest selection of inventory in the U S.

Lisa: And rivaled product innovation and ROI leadership.

Lisa: It represents an enviable foundation to build a digital platform that captures the full lifecycle.

Lisa: On the vehicle transaction.

Lisa: I'm joining the company at a pivotal moment in its growth journey.

Lisa: As our highly profitable listings business reaccelerate.

Lisa: And we continue to enhance and integrate existing and new transaction capabilities and product features.

Lisa: We are in the early innings of building, our vision and unlocking what we believe to be the full potential of our franchise.

Lisa: I will now turn to our results.

Lisa: And so the business mix has changed substantially versus last year, you might commentary I will I like both year over year.

Lisa: Sequential trends.

Lisa: We experienced exceptional momentum in our marketplace business.

Lisa: Which continued to accelerate and achieve the fastest year over year revenue growth rate in nearly three years.

Elisa Palazzo: Our marketplace business is a unique asset with the largest network of dealers and the broader selection of inventory in the U.S. Unrivaled Product Innovation and ROI Leadership. It represents an enviable foundation to build a digital platform that captures the full life cycle of a vehicle transaction. I'm joining the company at a pivotal moment in its growth journey, our highly profitable listings business. We accelerate, and we continue to enhance and integrate existing and new transaction capabilities and product features. We are in the early innings of building our vision and unlocking what we believe to be the full potential of our franchise. I will now turn to our results.

While we continue to gain leverage in our cost base and expanded our non-GAAP margins.

Lisa: Cross all our business segments and geographies.

Lisa: As the car off our transaction closed and we now have full control of the assets.

Lisa: We plan to focus on achieving operational efficiencies and maintaining financial discipline as we look to return the business to profitability.

While we expect this process to take several quarters, we are encouraged by the operational progress to date.

Lisa: Total fourth quarter revenue was 223 million.

Lisa: Down 822% year over year.

Lisa: Driven by lower wholesale and product revenue.

Elisa Palazzo: Since our business mix has changed substantially versus last year, in my commentary, I will highlight both year-over-year and sequential changes. We experienced exceptional momentum in our marketplace business, which continued to accelerate and achieve the fastest year-over-year revenue growth rate in nearly three years. While we continue to gain leverage in our cost base and expand our non-GAAP margins across all our business segments and geographies. As the car offer transaction closed, and we now have full control of the assets, we plan to focus on achieving operational efficiency and maintaining financial discipline as we look to return the business to profitability. Why do we expect this process to take several quarters? We are encouraged by the operational progress. Apple's fourth quarter, instead, was $223 million, down 22% year-over-year.

Lisa: And up 2% sequentially.

Lisa: We continue to expand our monthly recurring revenue base.

Lisa: Marketplace revenue was 182 million for the fourth quarter.

Lisa: Approximately 10% year over year.

Lisa: And 2% sequentially.

Lisa: Driven by the largest quarterly expansion in MRI in 10 quarters.

Lisa: As well as stable advertising around it.

Lisa: Consolidated car seat your 12% year over year.

Lisa: Driven primarily by the addition of new active dealers at current market rates.

Lisa: And existing dealers migrating to higher subscription tiers.

Lisa: In the fourth quarter.

Lisa: Listings business added approximately 17 million year over year in revenue.

Lisa: Nearly twice as much as the average quarterly expansion, we achieved in nearly three years.

Elisa Palazzo: Driven by a lower Wholesale and Product Ratio, and up 2% sequentially. As we continue to expand our monthly recurring revenue base, Marketplace revenue was $182 million for the fourth quarter, up approximately 10% year-over-year and 2% sequentially.

Lisa: Wholesale revenue was 22 million for the fourth quarter.

Lisa: Down 7% year over year.

Lisa: And up 1% sequentially.

Elisa Palazzo: Driven by the largest quarterly extension in MRR in 10 quarters, as well as Stable Advertising Rights, Consolidated Car Siege drew 12% year-over-year, driven primarily by the addition of new active dealers at current market rates and existing dealers migrating to higher subscription tiers. In the fourth quarter, our listings business added approximately $17 million in revenue year-over-year, nearly twice as much as the average quarterly expansion we achieved in nearly three years. Wholesale revenue was $22 million for the fourth quarter, down 7% year-over-year and up 1% sequentially.

Lisa: Driven by a modest increase in dealer to dealer transaction volume.

Lisa: In the fourth quarter, we continue to prioritize operational improvements well.

Lisa: While overall market conditions remain muted as wholesale prices are on a path to normalization.

Lisa: But remained elevated.

Lisa: Lastly product revenue was 19 million for the fourth quarter.

Lisa: Down 81% year over year.

Lisa: And down 5% sequentially.

Lisa: Reflecting our decision to continue to limit the transaction volume and lower Asp's.

Lisa: As well as meaningfully reduced arbitration remedy.

Lisa: Instant Max cash offer our consumers to dealer product.

Elisa Palazzo: Driven by a modest increase in dealer-to-dealer transaction volumes. In the fourth quarter, we continue to prioritize operational improvement. While overall market conditions remain muted as wholesale prices are on a path to normalization, for Remain Elevated. Lastly, product revenue was $19 million for the fourth quarter, down 81% year-over-year and down 5% sequentially.

Lisa: <unk> generated $16 million in revenue in the fourth quarter.

Lisa: Down 78% year over year.

Lisa: And 12% sequentially.

Lisa: Is it growing number of dealers continue to opt in for a highly profitable subscription based product.

Lisa: Dealer offers.

Lisa: I will now discuss our expenses and profitability on a non-GAAP basis.

Lisa: Fourth quarter consolidated non-GAAP gross margin was 78%.

Elisa Palazzo: Reflecting our decision to continue limiting transaction volume and lower ASP, as well as Meaningfully Reducing Arbitration Rapport, Instant Max Cash Offer, our consumer to dealer product, generated $16 million in revenue in the fourth quarter, down 78% year-over-year and 12% sequentially. As a growing number of dealers continue to opt-in for a highly profitable subscription-based product, stop dealer opts. I will now discuss our expenses and profitability on a non-GAAP basis. Fourth quarter consolidated non-GAAP gross margin was 78%, compared to 50% in the prior year quarter and 77% in the third quarter.

Lisa: Compared to 50% in the prior year quarter.

And 77% in the third quarter.

Lisa: The meaningful expansion in non-GAAP gross margin.

Lisa: It was due to the shift in revenue mix towards our high margin marketplace business.

Lisa: Which represented 82% of our revenue in the fourth quarter.

Lisa: Up from 58% in the prior year and 81% in the third quarter.

Lisa: Within the individual business segments.

Lisa: Marketplace non-GAAP gross margin expanded 155 basis points year over ear.

Elisa Palazzo: The Meaningful Expansion in Non-Gap Gross Margin was due to the shift in revenue mix towards our high-margin marketplace business, which represented 82% of our revenue in the fourth quarter, up from 58% in the prior year and 81% in the third quarter, within the individual business sector. Marketplace Non-Gap Gross Margin expanded 155 basis points year-over-year and approximately 55 basis points sequentially. Driven by a favorable product, our digital wholesale non-gap gross margin was up 130 basis points sequentially. Although driven by the early operational improvements I referenced earlier, as well as one-time and prior period favorable items, fourth quarter non-GAAP operating expenses were relatively flat year-over-year and fell 5% sequentially to 119,000, predominantly driven by lower sales and marketing, which was down 3% year-over-year and 7% sequentially.

Lisa: And approximately 55 basis points sequentially.

Lisa: And by favorable product mix.

Lisa: Our digital wholesale non-GAAP gross margin was up 130 basis points sequentially.

Lisa: Driven by the early operational improvements I referenced earlier.

Lisa: Well as one time in prior period favorable items.

Lisa: Fourth quarter non-GAAP operating expenses were relatively flat year over year.

Lisa: And fell 5% sequentially.

Lisa: $119 million.

Predominantly driven by lower sales and marketing spans.

Lisa: Which was down 3% year over year.

Lisa: And 7% sequentially.

Lisa: The sequential decrease in sales and marketing expense reflects our typical fourth quarter cadence.

Lisa: As well as our decision to limit marketing investment for instance, Max cash offer in 2023.

Elisa Palazzo: The sequential decrease in sales and marketing expense reflects our typical fourth quarter cadence, as well as our decision to limit marketing investment for the instant max cash offer in 2023. Our fourth quarter non-GAAP product, Technology and Development Experience, Group 2 percent year-over-year, but we're down 3% sequentially to $29 million. As we slow our pace of hiring in the fourth quarter, as a result of a sequentially lower known gap in rating expenses, we generated consolidated adjusted EBITDA of $61 million in the fourth quarter, up 120% year-over-year and 26% sequentially.

Lisa: Our fourth quarter, non-GAAP product technology and development expenses.

Lisa: The 2% year over year.

Lisa: But we're down 3% sequentially to 29 million.

Lisa: As we slowed our pace of hiring in the fourth quarter.

Lisa: As a result of sequentially lower non-GAAP operating expenses.

Lisa: We generated consolidated adjusted EBITDA of.

Lisa: 61 million in the fourth quarter.

Lisa: Mm, 120% year over year.

Lisa: And 26% sequentially.

Lisa: Consolidated adjusted EBITDA margin.

Lisa: It was 27%.

Lisa: And expanded approximately 1800 basis points year over ear.

Lisa: And was up approximately 500 basis points sequentially.

Lisa: Fourth quarter margin year over year expansion was primarily driven by favorable segment mix as well as improved wholesale margins and some one off items.

Elisa Palazzo: Consolidated, Adjusted, Edited, and Margined revenue was 27% and expanded approximately 1,800 basis points year-over-year and was up approximately 500 basis points sequentially. Fourth quarter margin year-over-year expansion was primarily driven by favorable segments, as well as improved wholesale margins and some one-off items. Marketplace adjusted EBITDA increased 27% year-over-year and 21% sequentially to approximately 60. Digital Wholesale Adjusted EBITDA law, was approximately $1 million in the fourth quarter, including approximately 2 million in the prior period and one-off favorability. Excluding these items, Digital Wholesale Adjusted EBITDA would have been approximately flat sequentially. Non-GAAP diluted earnings per share attributable to common shareholders was $0.35 for the fourth quarter.

Lisa: Marketplace, adjusted EBITDA grew 27% year over year.

Lisa: And 21% sequentially.

Lisa: So approximately 62 million.

Lisa: Digital wholesale adjusted EBITDA loss.

Lisa: It was approximately 1 million in the fourth quarter.

Including approximately 2 million in prior period, and one off favor ability.

Lisa: Excluding these items.

Lisa: Digital wholesale adjusted Ebitdas would've been approximately flat.

Shelly.

Lisa: Yeah.

Lisa: non-GAAP diluted earnings per share attributable to common shareholders was 35 cents for the fourth quarter.

Lisa: Reflecting the increase in adjusted EBITDA.

Elisa Palazzo: Reflecting the increase in adjusted EBITDA, as well as the redaction in shares of Fannie, I will now discuss a few gap metrics that include one-time items related to the purchase of the remaining stake in the car offer in the fourth quarter. We incurred total GAAP operating expenses of $190,000, up 77% year-over-year, which includes approximately $50 million of share-based compensation incurred in connection with redeeming the remaining units of CARAF. Fourth Quarter GAAP Operating Loss was $22 million, down $52 million compared to operating income of $30 million in the prior year period. Fourth Quarter Gap Consolidated Net Loss was $23 million, down $46 million.

Lisa: As well as the reduction in shares outstanding.

Lisa: I will now discuss a few GAAP metrics did include one time items related to the purchase of the remaining stake in car offer in the fourth quarter.

Lisa: We incurred total GAAP operating expenses of 190 million.

Lisa: Up 77% year over year.

Lisa: Which includes approximately 50 million of share based compensation incurred in connection with redeeming the remaining units of cut off or.

Lisa: Fourth quarter GAAP operating loss was 22 million.

Lisa: Down 52 million compared to operating income of 30 million in the prior year period.

Lisa: Fourth quarter GAAP consolidated net loss was 23 million.

Lisa: Down to 46 million.

Elisa Palazzo: Get over it. We ended the fourth quarter with $312 million in cash and cash equivalents in short-term investments, a decrease of $135 million from the end of the third quarter. The lower cash balance was primarily driven by the $75 million cash consideration paid for the Carafer acquisition in December, as well as share repurchases in the fourth quarter. During the fourth quarter, we repurchased 4.8 million shares for an aggregate purchase price of $100 million.

Lisa: Year over year.

Lisa: We ended the fourth quarter with 312 million in cash cash equivalents and short term investments.

Lisa: A decrease of $135 million from the end of the third quarter.

Lisa: The lower cash balance was primarily driven by the 75 million of cash consideration.

Lisa: For the <unk> acquisition in December.

Lisa: As well as share repurchases in the in the fourth quarter.

Lisa: During the fourth quarter, we repurchased four 8 million shares for an aggregate purchase price of $100 million.

Lisa: It's the beginning of our buyback program in December 2022.

Elisa Palazzo: It marks the beginning of our buyback program in December 2022. We repurchase $223 million each year, equivalent to approximately 10% of our ascending capital as of December 2020. In November 2023, we announced that our board authorized an additional $250 million share repurchase program, expiring in December 2024.

Lisa: We repurchased 223 million shares equivalent to approximately 10% of our ascending capital.

Lisa: As of December 2022.

In November 2023, we announced that our board authorized an additional $250 million share repurchase program.

Lisa: Expiring in December 2024.

Elisa Palazzo: I will close my prepared remarks with our outlook for the first quarter. We expect our first quarter consolidated revenue to be in the range of 201 to 221. We expect the momentum in our marketplace business to continue in the first quarter, with quarterly revenue expected to be in the range of $182 million to $187 million, up between 9% and 12% year-over-year. Moving to EBITDA. We expect our first quarter non-GAAP consolidated adjusted EBITDA to be in the range of 41 million to 49 million, with wholesale transaction volumes sequentially lower in the first quarter.

Lisa: I will close my prepared remarks, with our outlook for the first quarter.

Lisa: We expect our first quarter consolidated revenue to be in the range of 201 to 221 million.

Lisa: We expect the momentum in our marketplace business to continue in the first quarter.

Lisa: With quarterly revenue expected to be in the range of 182.

Lisa: 187 million.

Off between 9% and 12% year over year.

Lisa: Moving to EBITDA.

Lisa: We expect our first quarter non-GAAP consolidated adjusted EBITDA.

Lisa: Being the range of 41 million to 49 million.

Lisa: With wholesales transaction volumes sequentially lower in the first quarter.

Lisa: On a non-GAAP basis, we expect operating expenses to increase sequentially in the first quarter.

Elisa Palazzo: On a non-gap basis, we expect operating expenses to increase sequentially in the first quarter, primarily driven by marketing spend as we launch our new brand campaign, Your Car, Your Way. In addition, we typically ramp back up our marketing spend by several million dollars in the first quarter after a seasonal reduction in the force. Going forward, for the rest of 2024, we expect quarterly marketing costs and operating expenses to remain roughly in line with the first quarter, but to gradually decline as a percentage of revenue, as we continue to grow our business throughout the year. Finally, we expect non-GAAP earnings per share to be in the range of 24 cents to 29.

Lisa: Primarily driven by marketing stands as we launched our new brand campaign.

Lisa: Your car your way.

Lisa: In addition, we typically ramped back up our marketing spend by several million dollars in the first quarter.

Lisa: After a seasonal reduction in the fourth quarter.

Lisa: Going forward for the rest of 2024.

Lisa: We expect quarterly marketing costs and operating expenses should.

Lisa: Should remain roughly in line with the first quarter.

Lisa: But to progressively decline as a percentage of revenue as we continue to grow our business throughout the year.

Lisa: Finally, we expect non-GAAP earnings per share.

Lisa: To be in the range of 21st son so.

29 cents.

Operator: With that, I would like to open the call for Q&A. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question area. You may press star 2 if you would like to remove your question from. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the so that we may address questions from as many participants as possible.

Speaker Change: With that I would like to open the call for Q&A.

Speaker Change: Thank you we will now be conducting a question and answer session.

Speaker Change: He would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Speaker Change: So that we may address questions from as many participants as possible. We ask that you limit yourself to one question and one follow up if you have additional questions you may re queue and time permitting those questions will be addressed.

Operator: We ask that you limit yourself to one question and one follow-up. If you have additional questions, you may re-queue, and, time permitting, those questions. One moment, please, while we pull. Thank you. Our first question comes from the line of Marvin Fong with BTIG. Please proceed with your question. Good evening.

Speaker Change: One moment, please while we poll for questions.

Thank you. Our first question comes from the line of Marvin Fong with B P. I G. Please proceed with your question.

Marvin Fong: Hi, good evening, Thanks for taking my question.

Marvin Fong: Thanks for taking my question. I thought I'd just ask about the car offer. I think you mentioned a couple of times that you're focused on continuing the operational efficiencies and maintaining financial discipline in that segment. I guess maybe if you could maybe just add a little more detail to that, maybe some of the guideposts or thresholds that you're looking to achieve kind of on the way to getting to where you want to be that we as investors could observe in your disclosures. So maybe that would be my final question.

Marvin Fong: I thought I'd just.

Marvin Fong: Ask about car off or I think you mentioned a couple of times that you were focused on.

Marvin Fong: Continuing the operational efficiencies and maintaining financial discipline in that segment.

Speaker Change: Yes, maybe.

Speaker Change: You could maybe just a little more detail to that maybe some of the guidepost or threshold that you're looking to achieve kind of on the way.

Speaker Change: Getting to where you want to be that that we as investors could.

Speaker Change: Observe.

Speaker Change: In your disclosure so maybe it doesn't seem like.

I like that.

Elisa Palazzo: Thanks for the question, Marvin. So let me preface by saying that we are incredibly excited about the long-term opportunity in digital wholesale. It's an underprivileged space with sustained secular demand tailwinds, and there is an opportunity for us to gain market share in this space over the long term. We have a number of initiatives underway, and we are in the process of rebuilding our leadership. And therefore, we estimate the business to return to profitable growth in the next several quarters. Now, I will focus on my commentary on the first quarter.

Speaker Change: I heard a bunch of Marvin So let me preface that we are incredibly excited about the long term opportunity in.

Speaker Change: In digital wholesale it's another French wasted space, we sustained secular demand.

Speaker Change: Very strong synergistic potential with our foundational listing business and.

Speaker Change: And there is an opportunity for us to gain market share in this space over the long term.

Speaker Change: We have a number of initiatives and away and we are in the process of rebuilding our leadership.

Speaker Change: And therefore, we estimate the business to return to profitable growth in the facts.

Speaker Change: Several quarters.

Speaker Change: Now I will focus on my commentary on the first quarter. So we have continued our efforts.

Elisa Palazzo: So, we have continued our efforts to drive operational efficiencies and enhance our product. Before we shift our focus externally to intensify our go-to-market efforts, we have improved our inspection, title transfer, and transportation capabilities, which have driven lower arbitration rates and better transportation. Through our initiatives, we have also reduced our fixed cost base in dollar terms for the last several quarters, and we are in the process of creating a shared service center with CarGurus as it relates to our support function. Therefore, we believe we are executing well against our strategy, and we're confident that we will return to profitable growth in the next few quarters. Some of you want to have it,

Speaker Change: To drive operational efficiencies and enhance our product.

Speaker Change: Before we shift our focus externally to intensify our go to market efforts.

Speaker Change: Maybe even further inspection title transfer and transportation capabilities.

Speaker Change: It hasn't driven lower arbitration rate.

Speaker Change: And that our transportation.

Speaker Change: The other initiatives. We have also used our fixed cost base in dollar terms for the last several quarters and we are in the process of creating a shared service center with cargo list as it relates to our support functions.

Speaker Change: So we believe we are executing well against our strategy and we're confident that we will return to profitable growth in the next few quarters.

Speaker Change: Kevin do you want to happen.

Kevin: Thank you Kevin.

Marvin Fong: Thank you, Nevin. Thank you. That's terrific, Alisa. Thanks for that color.

Kevin: Yeah.

Kevin: That's terrific. Thanks for that color and then maybe a follow up on.

Elisa Palazzo: And maybe a follow-up on, you know, you didn't provide full-year guidance, which is understandable, but you did provide some commentary about sales and marketing for the year. So, just... I just wanted to understand what gives you the confidence that you could kind of provide that outlook for sales and marketing spend, and should we take that, what you're saying about it being relatively flat for the rest of the year, kind of tying to what you were saying before that we shouldn't expect any, you know, major advertising push behind IMCO this year? So the marketing span is fully in our control, and we have visibility. And so, let me comment, take a step back, and comment on the main factors that we believe will affect the optics sequentially between Q4 and Q1. And so the first one is the seasonality of media attention.

Kevin: You didn't provide full year guidance, which is understandable, but you you did provide some commentary about sales and marketing for the year. So just.

Kevin: Just wanted to understand you know what.

Speaker Change: What gives you the confidence that you could kind of provide that outlook.

Speaker Change: For sales and marketing spend and should we take that.

Speaker Change: What you're saying about it being relatively flat for the rest of the year kind of tying to what you were saying before that we shouldn't expect any you know me.

Speaker Change: Age our advertising push behind I N C O four this year.

Speaker Change: And so some marketing spend is fully in our control and we have visibility.

Speaker Change: And so D. Let.

Speaker Change: Let me come and take a step back and comment on the.

Speaker Change: Main factors that we believe will affect the opex sequentially between Q4, and Q1 and so the first one is the seasonality of me is that if you look.

Elisa Palazzo: If you look, typically, we take down our media span in Q4, and we're going to step it back up in Q1. And we will, we expect to keep it constant throughout the year, as for my prepared remarks. The second one is a planned investment in sales and marketing, which is partially driven by our new branding campaign, which I also mentioned in my prepared remarks, and the second portion of it is really, you know, digital wholesale. So we said that in Q4, we had one-off favorability of approximately $2 million. We don't expect that to be repeated in Q1.

Speaker Change: Likely we see downward media spend in Q4 without stepping back up in Q1.

Speaker Change: And we will we expect to keep it constant Ravi are as for my prepared remarks.

Speaker Change: Can one and is a planned investment in sales and marketing, which is partially driven by our new Mark New branding campaign, which I also mentioned in my prepared remarks, and the second portion of it is really a digital wholesale so we said that.

Speaker Change: In Q4, we had one off the viability of approximately $2 million, we don't expect that to repeat again.

Speaker Change: So these are the key drivers of Opex going forward now it's important to also point out again as I mentioned in my prepared remarks, that's why do we expect opex and marketing spend to remain pretty much constant throughout the year.

Elisa Palazzo: So these are the key drivers of OPEX going forward. Now, it's important to also point out again, as I mentioned in my prepared remarks, that while we expect OPEX and marketing spend to remain pretty much constant throughout the year, or at least until the third quarter, we expect OPEX to decline progressively as a percentage of revenue as we continue to expand our franchise, and we expect the marketplace momentum to continue. So just to reiterate, so as a result, you know, sales and marketing as a percent of gross profit or as a percent of revenue, we expect to decline over the year. Okay, that's a terrific color, everyone.

Speaker Change: Or at least until the third quarter, we expect opex to decline progressively as percentage of revenue as we continue.

Speaker Change: Expand our franchise and we expect the marketplace momentum to continue.

Speaker Change: So just to reiterate the environment. So so as a result, you know sales and marketing as a percent of gross profit or as a percent of revenue we expect to decline over over the air.

Speaker Change: Yeah.

Speaker Change: Understood. Okay, that's terrific color everyone. Thanks, so much.

Marvin Fong: Thanks so much. Thank you. Our next question comes from Rajat Gupta with JP Morgan. Please proceed with your questions. Great. Thanks for taking the questions.

Yeah.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Rajat Gupta with JP Morgan.

Rajat Gupta: Please proceed with your question.

Rajat Gupta: Oh, great. Thanks for taking the questions just wanted to follow up on Martin's question earlier on the first quarter guidance. So if I look at the low end of the guidance on revenue and EBITDA.

Rajat Gupta: I just wanted to follow up on Marvin's question earlier on the first quarter guidance. So if I look at the low end of the guidance on revenue and EBITDA, it's down roughly $20 million sequentially, but in the marketplace, revenue guidance is kind of flattish to opt sequentially, even if we exclude the $2 million one-time car offer. Adjustment in the fourth quarter would imply something like OPEX going up between 15 to 20 million. I have a question for you. I know you're a marketing specialist, but I'm wondering if you can give us a little bit of background on what you're doing for the market-based business. First, do you think that's accurate or in the ballpark? And if it is, what's driving such a material pickup?

Rajat Gupta: It's down roughly $20 million sequentially.

Rajat Gupta: And but the marketplace revenue guidance is kind of flattish to up sequentially.

Rajat Gupta: Even if we exclude the 2 million one time car warfare.

Speaker Change: Adjustments in the fourth quarter, it would imply something like opex going up between $15 million to $20 million.

Speaker Change: For the market based business, especially like do you think that's accurate or in the ballpark and if it is what what's driving such a material pick up all of these all of that driven by just the marketing.

Jason Trevisan: I mean, is all of that driven by just the marketing spend that you refer to, or is there anything else with respect to call offer seasonality, or you mentioned transaction volume down, maybe that's driving the value even further lower in the first quarter? And I have a quick follow-up. I have a quick follow-up. Sure. Thanks, Jason. So, the drivers that Aliza just talked about from a largely marketing perspective, there's a seasonality element, there's a brand element, there are the non-recurring benefits in Q4 that we don't expect in Q1. There's a small element of lease expense that was not a full quarter.

Speaker Change: <unk> spend that you referred to or is there anything else.

Speaker Change: With respect to call for a seasonality or you know you mentioned transaction volumes are down maybe that's driving EBITDA, even further lower.

Speaker Change: In the first quarter I have a quick follow up thanks.

Speaker Change: Sure. Thanks, John.

Speaker Change: Jason.

Jason: So yeah. The drivers that are Lisa just talked about from largely a marketing perspective, there's a seasonality element, there's a brand element there.

Speaker Change: There are the one time nonrecurring benefits to Q4 that we don't expect in Q1.

Speaker Change: A small element of lease expense that was not a full quarter.

Jason Trevisan: And so a lot of that, and there's ad revenue seasonality as well. And so those would be offset by, you know, the midpoint of the guide and marketplace has growth. And so we would expect, you know, growth there at the mid to high end. Got it. Got it.

Speaker Change: And so.

Speaker Change: And so a lot of that and there's AD revenue seasonality as well.

Speaker Change: And so those would be offset by the midpoint of the guide and marketplace has growth and so we would expect.

Speaker Change: Growth there at the mid to heightened.

Speaker Change: Got it got it.

Jason Trevisan: And then just on, you know, the international businesses, both Canada and the UK. You know, now profitable. Is there like, you know, a ramp up in, you know, some sales and marketing efforts in those markets as well? Do you improve the profit contribution going forward? You know, just curious, like, how we should think about, you know, the profitability there for this year relative to, you know, the fourth-quarter exit rate? Yeah, the international businesses are both doing quite well and also doing well from a lead volume and quality perspective, both organically as well as paid. We've also introduced some new products, and so the momentum there is strong.

Speaker Change: And then just on you know the internet businesses.

Speaker Change: Canada and U K.

Speaker Change: You know now profitable is there like you know around then.

Speaker Change: Furthermore, giving I've heard some of those markets as well do you do to improve the profit contribution going forward.

Speaker Change: I'm just curious like how we should think about you know the profitability there for this year relative to the fourth quarter exit rate.

Speaker Change: Yeah, the international businesses, they're both doing quite well.

Speaker Change: And.

Speaker Change: Also doing well from a lead volume and quality perspective, both organically as well as paying they've also introduced some new products and so the momentum there is strong.

Speaker Change: And we are.

Jason Trevisan: And we are building on that momentum with some reinvestment in or elevated investment in marketing. Although we're also conscious to make sure that, you know, much like you may remember in our U.S. business several years ago, if we grow lead volume too quickly, it's tough to monetize it in a short enough period of time. And so we are being reasonably prudent in how much we're investing there, given all the strength in the organic lead growth. So it's a really good story, having crossed into profitability, but also being able to reap those margins without having to, you know, fuel them or feed them with increased marketing. 1 2 3, understood. Great. Thanks for the call and good luck!

Speaker Change: Building on that momentum with some reinvestment and or elevated investment in marketing. Although we're also conscious to make sure that you know.

Speaker Change: Much like you may remember in our U S business several years ago, if we grow lead volume too quickly, it's tough to monetize it in a short enough period of time, and so we are being reasonably prudent and how much we're investing there given all the strength in the organic lead growth. So it's a really good story, having crossed into profitability.

Speaker Change: But also being able to.

Reap those margins without having to fuel them feed them with increased marketing spend.

Speaker Change: Understood.

Speaker Change: For the color and good luck.

Speaker Change: Okay.

Brad Erickson: Hi. Thank you. Our next question comes from the line of Brad Eckerson with RBC Capital Marketing. Please proceed with your, Hey, good evening. This is Logan on behalf of Brad.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Brad at Christian with RBC Capital markets. Please proceed with your question.

Speaker Change: Hey, good evening this is Logan on for Brad.

Logan: Thanks for taking the question. Given that the off-cycle or off-lease cycle is a little bit light because of just OEM production over the past couple of years, just curious, how does that sort of play out with your dealer's inventories between franchise and independent? And just curious about how you guys are positioned between those two subsets of used car dealers. And then, just as a follow-up to the marketing comments through the year, how does affordability changes in used car pricing potentially decline sort of impact your... Your expectations for marketing spend and margins throughout the year. Sure. Thanks, Logan and Jason.

Thanks for taking the question.

Logan: Given that the off cycle are off lease cycle was a little bit light because of just OEM production over the past couple of years, just curious how does that sort of play out with your dealers inventories between franchise and independent and just curious on how you guys are positioned between those those two subsets.

Logan: Subsets of used car dealers.

Logan: And then just as a follow up of.

The marketing comments through the year, how does the affordability changes in used car pricing as potentially decline sort of impact or are.

Logan: Your expectations for marketing spend and margins throughout the year. Thanks.

Speaker Change: Sure. Thanks Logan Jason.

Jason Trevisan: So from an inventory perspective, the biggest changes that we're seeing are growth in new car inventory, as you would expect. We have seen a slight increase, a continued increase in used car inventory, but it's not nearly as pronounced as new car inventory, which was, you know, hit far lower depths and is now growing back much faster, still not even close to pre-pandemic levels for new car sales, and also, I don't believe, not yet back to pre-pandemic levels for used car sales, although much closer. And so, you know, rising inventory tends to be a good thing for our marketplace business. As with higher turn times on lots, dealers feel understandably compelled to want to market more to move the cars quicker, especially if floor plan financing rates are high, which they are. And so, specifically, as it relates to off-cycle lease returns, it means that dealers are also looking for not only ways to sell those cars at retail but also wholesale. And so, that should be a tailwind to the car offer. In terms of affordability, that, yeah, that was the headline challenge, one of the headline challenges in 2023.

So from an inventory perspective.

Jason: The biggest changes that we're seeing our growth in new car inventory as you would expect we have seen a slight increase continued increase in used car inventory, but it's not nearly as pronounced as new car, which was.

Jason: Far lower deficit is now growing back much faster still not even close to pre pandemic levels.

Jason: For new car and also I don't believe not yet back to pre pandemic levels for used car all of them much closer.

And so inventory rising inventory tends to be a good thing for our marketplace business.

Jason: Dealers are as does higher turn times on life dealers feel are understandably compelled to want a market more to move the cars quicker, especially of floor plan financing rates are high which they are.

Jason: And so specifically as it relates to our cycle lease returns are it means that dealers are also looking for not only ways to sell those cars retail but also wholesale.

Jason: And so that should be a tailwind to car offer.

Jason: In terms of affordability that that yeah that was the headline challenge one of the headline challenges in 2023.

Jason Trevisan: And, excuse me, dealers typically have one of two ways to help combat that. One is to lower the price of the car; the other is to market it more aggressively. We tend to think that marketing more with platforms like ours is a better ROI for them than lowering prices, but we also know that they do have to lower prices, and so we give them insights and tools to help with that as well. So, we do think that affordability will help in 24 better than it did in 23. There is continues to be, though, an interesting dynamic between new and used where a lot of the OEM incentives on new used car pricing still does need to come down quite a bit to make sense relative to new car prices. So we think it's generally going to be better.

Jason: And.

Jason: Excuse me our dealers typically you have one of two ways to help combat that one is to lower the price of the car. The other is to market more aggressively we tend to think that marketing more with platforms like ours is a better ROI for them that lowering price, but we also know that they do have to lower prices. So we can give them insights and tools to help with that as well so.

Jason: We do think that our affordability will held in 'twenty four better than it did in 2003. There is continues to be though an interesting dynamic between new and used were with a lot of the OEM incentives on new <unk>.

Jason: Used car pricing still does need to come down quite a bit to make.

Jason: Relative to new car.

Jason: So we think it's generally going to be better we think demand as a result consumer demand will be up.

Jason Trevisan: We think demand, as a result of consumer demand, will be up. But again, regardless of whether prices are rising or falling or inventories rising or falling, we're trying to give our dealers more and more insights and actionable tools to help them manage their businesses better. Gotcha. Super helpful.

Jason: But again, regardless of whether prices are rising or falling or inventories rising or falling we're trying to give our dealers more and more insights and actionable tools to help them manage their business better.

Jason: <unk>.

Speaker Change: That's super helpful. Thanks, guys.

Tom White: Thanks, guys. Thank you. Our next question comes from the line of Tom White with D.A. Davidson.

Speaker Change: Thank you. Our next question comes from the line of Tom White with D. A Davidson. Please proceed with your question.

Tom White: Please proceed with your question. Oh, great. Thanks for taking my questions.

Tom White: Oh, great. Thanks for taking my questions just a couple on the so my car dealer offer product.

Sam Zales: Just a couple on the Sell My Car Top Dealer Offer product. Jason or whomever, I'm just curious if you guys have any stats about maybe how dealers are converting on the foot traffic element of that offering, you know, in terms of turning sellers into buyer customers on their next car. I'm just curious whether, you know, the value that they get there is priced into the offering, the way you guys are pricing that product today? And then could you just give a little bit more color on the intake tool you mentioned for this, just kind of what's the impetus for adding that? What will it look like exactly? Tom, I'm happy to take it. Sam Zales, thanks for asking.

Jason or whomever I'm just curious if you guys have any stats about maybe how dealers are converting on the on the foot traffic element of that offering.

Tom White: In terms of turning sellers into buyer customers on their on their next car and just curious whether you think the value that they get theirs is priced into the offering you know the way you guys are pricing that product today, and then could you just give a little bit more color on the intake tool you mentioned for this just kind of what's the impetus for adding that what will it look.

Speaker Change: Like exactly thanks.

Got it and I'm happy to take any Sam Zales. Thanks for asking we're seeing really tremendous results from our customer base.

Sam Zales: We're seeing really tremendous results from our customer base on conversion rates, and they're comparing them. Reminder that I may have mentioned this the last couple quarters, we built the product based on customers asking us to do so. And we saw products in the market in KBB and AccuTrade and said we'd like something different, something better.

Speaker Change: Our conversion rates and Theyre comparing them reminder, that I may have mentioned this the last couple of quarters. We built the product based on customers asking us to do something they saw products in the market and cabling D and accu trade and said, we'd like something different something better we're offering something completely unique to consumers, which is the choice.

Sam Zales: We're offering something completely unique to consumers, which is the choice of a white glove service with IMCO, as you know, in combination with these top dealer offers, which means for the two-thirds or so of consumers who are saying, I am going to sell a car, but I might be buying a car as well, I'm coming into the dealership, and that dealership has an advantage of having a buy-sell. And we talked about earlier, with wholesale inventory, as low as it is and high-priced as it is, this is gold to dealers having the opportunity to buy a consumer's vehicle. So we're seeing a tremendous conversion rate. We are still in a limited market launch. We're in 18 markets, as you know, 40% of the country.

Speaker Change: Hey, a white glove service with I M. C. L. A as you know in the combination with its top dealer offers which means or the two thirds or so consumers are saying I am going to sell a car, but I might be buying a car as well I'm coming into the dealership and that dealership is an advantage to have a buy sell and we talked about earlier with wholesale.

Speaker Change: Inventory as low as it is and not in high priced as it is this is going to deal with having the opportunity to buy a consumer's vehicle.

Speaker Change: So we're seeing tremendous conversion rate we are in it's still a limited market launch. We're in 18 markets as you know 40% of the country. So we're able to work with every one of our customers has evolved so far and the feedback I've heard from customers is conversion rates feeding those other products in the marketplace.

Sam Zales: So we're able to work with every one of our customers that's involved so far, and the feedback I've heard from customers is that conversion rates are beating those of other products in the marketplace. Thank you.

Speaker Change: You asked about the intake tool, we're using that for a number of reasons. One is to create more consistency for the consumer experience. We won every dealer to use the same type of inspection capabilities to be able to say this is the fair market value for that vehicle and leaves the consumer feeling great about their experience that import.

Sam Zales: We're using that for a number of reasons. One is to create more consistency for the consumer experience. We want every dealer to use the same type of inspection capabilities to be able to say this is the fair market value for that vehicle. It leaves the consumer feeling great about their experience, but importantly, creates consistency between each of our dealers to have the same experience as others so that it creates a universal objective and strong experience on both sides of the marketplace. What that's led to is great results.

Speaker Change: <unk> creates the consistency between each of our.

Speaker Change: Each of our dealers to have the same experience as others so that it could.

Speaker Change: And Universal objective and strong experience on both sides of the marketplace. What that's led to is great results. We're looking forward to continuing that as we go forward. We're in early access scale, but we're very very encouraged by the launch of this program that we started in fourth quarter of last year and has already expanded in.

Sam Zales: We're looking forward to continuing that as we go forward. We're in early access still, but we're very, very encouraged by the launch of this program that we started in the fourth quarter of last year and have already expanded, and we look to further expand as the year goes on. Okay, thanks.

Speaker Change: We look to further expand as the year goes on.

Speaker Change: Okay. Thanks, and it's a subscription offering so does it show up in in your marketplace segment or was it didn't offer it does it does the time, it's a it's a marketplace subscription product as an add on it's now going to a dealer sad thing we're already talking to you about our listings product that lets you sell vehicles, here's another subscription product.

Tom White: And it's a subscription offering. So does it show up in your marketplace segment? Or was it in our offer? It does.

Sam Zales: It does, Tom. It's a marketplace subscription product. It's an add-on. It's now going to a dealer set and saying, "We're already talking about a listing product that lets you sell vehicles." Here's another subscription product with a high gross margin that allows you to join and get more out of buying cars from consumers, which you said is gold in the marketplace because it's the hardest to find today without those off-lease returns. I appreciate it. I appreciate the call, Sam.

Speaker Change: With high gross margin that allows you to join and get more out of buying cars from consumers. When she said there's gold in the marketplace because it's the hardest to find today without those off lease returns.

Speaker Change: I appreciate it appreciate the color. Thank you.

Naved Khan: Thank you. Thank you. The next question comes from the line of Naved Khan with V. Riley Security. Please proceed with your questions. Hi, this is Ryan on Pretty Bad. Just two for me, if I may.

Speaker Change: Thank you. The next question comes from the line of Naveed Khan with B Riley Securities. Please proceed with your question.

Hi, This is Brian on for Doug. Thanks for taking my question just two for me if I may so.

Ryan: First, you mentioned further price changes through ABRs in 2024. http://TheBusinessProfessor.com Second... CarGurus Ad Revenue. It seems like spending is improving across the industry. How are you guys? Hi, Brian. I'm Sam Zales.

Naved Khan: First you had mentioned for their price changes through a be ours. In 2024 can you discuss the scope and percentage of dealerships that Macy's significant changes and then secondly in terms of Carter's AD revenue. It seems like spending is improving across the industry. So.

Speaker Change: How are you guys thinking about the opportunity there. Thanks.

Speaker Change: Hi, Brian It's Sam Zales.

Sam Zales: On price changes, I want to remind you that our CARCID success, our highest ever year-over-year CARCID growth, came because we have three or four major levers we use. One is just pricing dealers at market rates when they come in. Second, is upselling dealers to a higher or premium package. The third is core unit pricing growth with our AVRs, and then also the product attachment rates, which are very, very strong. On the pricing side, we're seeing the continued success of dealers recognizing our ROI that is working tremendously for them and going in with an annual business review and offering a couple of different things. It's not just a straight price increase.

Sam Zales: Price changes I want to remind you that our car sale success, our highest ever year over year car seat growth came because we have three or four major levers. We use one is just pricing dealers at market rates when they come in second is upselling, our dealers to a higher a premium pack.

Sam Zales: And then third is core unit pricing growth with our ABR and then also the product attachment rates, which are very very strong.

Sam Zales: On the pricing side, we're seeing the continued success of our.

Dealers, recognizing our ROI that is working tremendously for them and going in with an annual business review and offering a couple of different things. It's not just a straight price increase and say here's a package that they did it they may be better serving you to grow your ROI as a customer and in your retail business and that might require just a higher spec.

Sam Zales: It's saying, here's a package that may be better serving you to grow your ROI as a customer and in your retail business, and that might require just a higher spend to get more value. But in many cases, we're taking the below-market-priced dealers, understanding that they're below market, and saying this is where the rest of the market is paying for that program you're on. If you want to stay in, here's the price point to get into it. Here's a lower-level product if you want that.

Sam Zales: And to get more about it but in many cases, we're taking the below market priced dealers.

Sam Zales: Understanding that they're below market and saying this is where the rest of the market is paying for that program. You're on if you want to stay in there. He was the price point to get into it here as a lower level of product. If you want that and you can choose to leave the program at those prices that pricing isn't working so we're offering multiple options that worked tremendously to grow as one of the lever.

Sam Zales: And you can choose to leave the program if that pricing isn't working. So we're offering multiple options that work tremendously as one of the levers to grow our car business. And as you've heard before, when dealers say, "I don't want to take that program," more than 50% of them come back onto the program within two quarters. So we hit about 20% of our customers last year with the ABR process. We'll continue to be aggressive on that as our results continue to work as well as they are. I'm not going to give a specific number, but we see the same kind of trajectory as we started the new year.

Sam Zales: To grow our Carson and as you've heard before when dealers, saying I don't want to take that program more than 50% of them come back onto the program within two quarters. So we hit about 20% of our customers last year with the a b our process will continue to be aggressive on that as our results continue to work as.

Sam Zales: Well as they are I'm not going to give a specific number but we see the same kind of trajectory as we started the new year and we're going to take any underpriced customers that are below market rates and because we have the confidence in that ROI to offer them the packages that need the ROI thresholds that they'll still be positive about but that give me there.

Sam Zales: And we're going to take any underpriced customers that are below market rates and, because we have confidence in that ROI, offer them packages that meet the ROI thresholds that they'll still be positive about, but then give a fair share of that leverage to car growers. So we're excited to continue that process, and hopefully, we will continue to see the successes you're seeing in our car sit business growing as quickly as it has. From an ad revenue perspective, we are cautiously optimistic that this will be a year of strong performance in our business. The incentives are out there with OEMs spending more. Our year-end upfront advertising interest is strong, and so we believe that will be a business that returns to solid performance for us in 2024. I got it.

Sam Zales: Chair of that lever in Chicago. So we're excited to continue that process and hopefully that will continue to see the successes you're seeing in our car sit in our marketplace business growing as quickly as it has from an AD revenue perspective, we are cautiously optimistic that this is a year of strong performance in our business and incentives are out there with <unk>.

Sam Zales: I am spending more our yearend upfront advertising interest is strong and so we believe that will be a business. It returned to solid performance for us in 2024.

Speaker Change: Got it thank you.

Okay.

Speaker Change: Yeah.

Speaker Change: Thank you.

Jed Kelly: Thank you. Our next question comes from the line of Jed Kelly with Oppenheimer. Please proceed with your question. Hey, great, great.

Speaker Change: Our next question comes from the line of Jed Kelly with Oppenheimer. Please proceed with your question.

Jed Kelly: Hey, great great. Thanks for taking my question just following up on the last one sort of around the you know if you said 20% of E. B are just as we think about the trajectory of car sit in the back half as comps get tougher.

Sam Zales: Thanks for taking my question. Just following up on the last one, sort of around the, you know, you said 20% of EBR, just as we think about the trajectory of the car set in the back half and as cops get tough, are you expecting the same amount of pricing pressure? And then my second question is, sort of, the potential cut in interest rates keeps getting pushed out. How should we view the pace of interest rates impacting, you know, consumer demand and, you know, your conversations with dealers? Thank you. Jed, I'll take the first on ABR, Sam Zales. Thanks.

Jed Kelly: Are you expecting the same amount of pricing pressure and then my second question is sort of the you know the.

Jed Kelly: <unk> cut interest rates keeps getting pushed out.

Jed Kelly: Should we view the pace of interest rates impacting consumer.

Jed Kelly: Consumer demand in your conversations with dealers. Thank you.

Jed Kelly: Jed I'll take the first an a b or Sam zales. Thanks.

Sam Zales: I'm going to keep leaning precariously on the multiple levers that we use there, and I think this is a really important message. You know, ABR worked really successfully last year. We're going to continue to do that for underpriced customers, and that, you know, is all fueled by our continued growth in our audience. Terrific to see our audience growing, which means we're providing more connections and more, you know, closed sales for our customers. So it's pricing new dealers, and we're continuing to succeed on that front. It's also upselling the premium tiers.

Sam Zales: I've Gotta keep leaning for car Sid on the multiple levers that we use there and I think this is a really important message.

Sam Zales: Worked really successfully last year, we're going to continue to do that for underpriced customers and that is all fueled by our continued growth in our audience by the way terrific to see our audience is growing which means we're providing more connections and more.

Sam Zales: Closed sales for our customers, but it's pricing new dealers and were continued continuing to succeed on that front. It's upselling. The premium tiers remember now we've launched the digital deal product, which is working so effectively for our customers to close it down funnel consumer into our premium packages. So as we upsell our dealers into.

Sam Zales: Remember now we've launched the digital deal product, which is working so effectively for our customers to close a down-funnel consumer into our premium packages. So as we upsell our dealers into the premium packages, they're subscribing to Digital Deals to get access to those very low-funnel shoppers who are closing at two to five times our general deal. And then we'll continue to work on pricing. We're continuing to product attach. The top dealer offer gives us another product in the arsenal to go to those dealers and add more subscription revenue. So I think it'll be the combination of those and not just pricing pressure to get us there. But I'll give you an example of a customer coming to our revenue kickoff just a couple weeks ago and saying, "I'm closing 46% of your leads."

Sam Zales: The premium packages there is subscribing to digital deal to get access to those very low funnel shoppers were closing at two to five times are generally.

Sam Zales: And then we will continue to work on pricing, we're continuing to product attach top dealer offer gives us another product in the Arsenal to go to those dealers and add more subscription revenue. So I think it would be the combination of those and not just pricing pressure.

Sam Zales: To get us there, but I'll give you examples of our customer coming into our revenue kick off just a couple of weeks ago, and saying I'm closing 46% of your lead.

Sam Zales: That tells us there's more opportunity to continue delivering value between what we're providing to our dealer customers and what we're reaping on our side of the business, and so we think there's, even though we're going against comps that'll be bigger, we do feel very strongly about this trajectory you're seeing, and Aliza's remarks mentioned that the growth of our marketplace business makes us feel very confident going forward. And then I can add, Jed, just on your third part there on interest rates and the impact on consumers. So, as I mentioned a few minutes ago, you know, two factors that do help our marketplace business that are a tailwind are rising inventory and rising turn times. That tends to spur most dealers to want to market more.

Sam Zales: Tells us we know there is more opportunity to continue.

Sam Zales: Managing the value between what we're providing to our New York customers to what we're reaping on our side of the business and so we think there is even though we're going against comps that it'll be bigger we do feel very strongly about this trajectory you're seeing and it leaves his remarks mentioned the growth of our marketplace business makes us feel very confident going forward.

Speaker Change: And then I can add Chad just on your third part there on interest rates and an impact with consumers. So as I mentioned a few minutes ago.

Speaker Change: Two factors that do help our marketplace business that are a tailwind are rising inventory and rising turn times that tends to spur most dealers to want to market more.

Sam Zales: And I would also say that it's not necessarily adding marketing budget dollars for a dealer, but it's reallocating how they spend their dollars. And remember that they're spending, you know, a reasonably small fraction in marketplaces today, and yet it remains one of the highest ROIs for them. And within marketplaces, we are often cited as the strongest ROI for dealers. So it's a pretty safe place for them to spend.

Chad: And I would also say that it's not necessarily adding marketing budget dollars for a dealer, but it's reallocating how they spend their dollars and remember that theyre spending you know reasonably small fraction in marketplaces today and yet it remains one of the highest rois for them Oh.

Chad: Within marketplaces, we are often cited as the strongest ROI for dealers.

Chad: So it's a pretty safe bet.

Chad: Place for them to spend if interest rates are you know where to come down and consumer demand were to increase that tends to have a mixed impact on our marketplaces. So there's not a high correlation between interest rates and our ability to sign new dealers.

Jason Trevisan: If interest rates, you know, were to come down and consumer demand were to increase, that tends to have a mixed impact on our marketplace. And so there's not a high correlation between interest rates and our ability to sign new dealers. And if you look at SAR, for instance, if the SAR expectations change by 5 or 10%, we don't see a discernible impact on our bookings either. And so it's fairly immune to that.

Chad: And if you look at Saar for instance, if the Saar.

Chad: Expectations change by five or 10%, we don't see a discernible impact on our bookings either and so its fairly immune from that one thing that we are doing though to help insulate. Even further is we're trying to add a lot more value to our marketplace to our dealer customers and marketplace with insights and data.

Jason Trevisan: One thing that we are doing, though, to help insulate even further is trying to add a lot more value to our dealer customers and marketplace with insights and data and other tools that are independent from just simply the leads, the quantity and quality of leads that we deliver to them, and the connections that we deliver to them, which we're very confident in the volume and growth of that. The one final area I would say is finance in advance or consumer finance, a revenue stream of ours which is small on a relative basis, but it's high margin, and It's not insignificant.

Chad: And other tools that are independent from just simply the leads the quantity and quality of leads that we delivered them and the connections that we deliver to them, which we're very confident in the.

Chad: Volume and growth of that and the one final area I would say is the finance in advance or consumer finance revenue stream of ours, which is small on a relative basis, but it's high margin and it's.

Chad: It's not insignificant as interest rates have risen those approval rates have gone down and so that business has suffered a little bit from it and and so if interest rates were to come down then we would see higher growth than we're currently forecasting.

Jason Trevisan: As interest rates have risen, those approval rates have gone down, and so business has suffered a little bit from it. And so if interest rates were to come down, then we would see, you know, higher growth than we're currently forecasting. Thank you. Our next question comes from the line of Chris Pierce with Needham & Company. Please proceed with your questions. Hey, good evening. Can you guys talk about the dealers you're adding back into the marketplace? Are they 100% new to the platform, or have they gone away?

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Chris appears with Needham and company.

Chris: Proceed with your question.

Chris: Hey, good evening can you guys talk about the dealers, you're adding back onto the marketplace or are they 100% new to the platform or had they went away I just wanted to get a sense of what's happening under the surface on the dealer side.

Chris Pierce: I just want to get a sense of what's happening under the surface on the dealer side, given the kind of detail you've shared around CARCID in the future. Thanks. Thanks, Chris. Sam here, and it's a mix.

Chris: Given kind of the detail you've shared around in Carson in the future. Thanks.

Sam Zales: Thanks, Chris Sam here, and it's a mix I mentioned, the the a b R outcomes, which is a percentage of dealers, who say I'm not going to take that.

Sam Zales: I mentioned the ABR outcomes, which is a percentage of dealers who say, I'm not going to take that, you know, that price point. That's a small percentage, but more than 50% are coming back on within two quarters. So we are getting dealers who look and will say, as Jason was just mentioning, oh, the market's changed a little bit. You know, consumer demand is down, particularly for the small independent dealer who's living off of, in some cases, credit card payments for the marketing that they do. They're very price sensitive, so they'll come in, get off the program during the ABR process, stay off for four months, and then say, my gosh, my business is shrinking. Let me get back on again.

Chris: That price point, that's a small percentage, but more than 50% are coming back on within two quarters. So we are getting dealers, who look and we'll say as Jason was just mentioning how the market's changed a little bit you know the the consumer demand is down, particularly for the small independent dealer who was living off.

Chris: In some cases credit card payments for the marketing that they do they're very price sensitive so they'll come in and get off the program. During the AGR process stay off for four months and then saying my gosh My businesses shrinking let me get back on again, so we see the most turnover in that small independent segment, which doesn't.

Sam Zales: So we see the most turnover in that small independent segment, which doesn't, you know, make the biggest difference to our MRR overall, but you'd want to keep those customers because they're important to the consumer. Mix in that they're getting all different types of vehicles to purchase from, but we're still winning new business. And it's hard to believe.

Chris: You know it makes the biggest difference to our MRO, our overall, but you want to keep those customers because they are important to the consumer mix that theyre getting all different types of vehicles to purchase from but we're still winning new business and it's hard to believe and when you look at our Tam out there. There is still a significant number of franchise dealers and independent dealers, who are on the sidelines for one.

Sam Zales: And when you look at our TAM out there, there are still a significant number of franchise dealers and independent dealers who are on the sidelines for one reason or another. As Jason mentioned, they may be spending more money on local advertising, radio, TV, other forms of media that are not even trackable and getting them converted over. There are still a lot of them saying, "I have not been on a third-party marketplace. Let me go to the one with the biggest audience driving the biggest ROI." That's our opportunity to continue growing and fulfilling that new dealer ads segment you're asking about. Okay, cool. And then on the turn time data that you referenced, is this data that you already have because you have the dealer's inventory, or does the dealer have to send you new information?

Chris: Reason or another Jason mentioned, they may be spending more money on local advertising radio television and other forms of media that are not even trackable and to get them converted over there is still a lot of them, saying I have not been on a third party marketplace. Let me go to the one with the biggest audience driving the biggest ROI, that's our opportunity to continue growing.

Chris: And and fulfilling that our new dealer ads segment, you're asking about.

Speaker Change: Okay Cool and then on the turn time data that you referenced is this state or that you already have because you have the dealer's inventory or dealer has to send you new information and I'm sort of asking because like you let into with that can help with car offer adoption, helping dealers know what cars to restock their lot with is this something that exist right now or the.

Sam Zales: And I'm sort of asking because, like you led into how that can help with car offer adoption, helping dealers know what cars to restock their lot with. Is this something that exists right now where the plumbing has to be put in place, or dealers have to send you more data to kind of really, you know, hone this product? It's a great question, Chris.

Speaker Change: Plumbing has to be put in place or do you just have to send you more data to kind of really you know home this product.

Speaker Change: It's a great question, Chris we have the data.

Sam Zales: We have the data. So the inventory feeds we get from our dealers are ones in which we then look at how quick those inventories are turning. We see when vehicles are on our site and go off of our site, so we're able to look at that information at the turn times. And what dealers have asked us is two things. As Jason pointed out, we don't have to just provide leads and connections to provide value to our dealers. They want consultative feedback to help them run their retail operations more effectively.

Speaker Change: So the inventory piece, we get from our dealers are ones in which we then look at how quick those those those inventories are turning we see when vehicles are on our site and go all of our sites, we're able to look at that information and the turn times and what dealers have asked US is two things Jason pointed out we don't have to just provide leads and connections.

Speaker Change: <unk> value to our dealers they want the consultative feedback help them run their retail operations more effectively so what they're saying is combined consumer demand data, which is and they all say it's the same way you have the largest audience you can tell us where consumer demand is by geographic area down to a local market tell us.

Sam Zales: So what they're saying is combine consumer demand data, which is, and they all say it's the same way, you have the largest audience, you can tell us where consumer demand is by geographic area down to a local market, tell us what vehicles consumers are searching for and looking for, what turns I have on those vehicles today, how are my competitors turning their inventory, and then tell me what vehicles I should be sourcing. So the great opportunity here is to combine the retail and wholesale capabilities that no other marketplace can provide with our combination of CarGurus and CarOffer. You go to CarOffer, and you say, you have a matrix set up to buy these vehicles.

Speaker Change: What vehicles consumers are searching for and looking for what turns I have on those vehicles today, how are my competitors turning their inventory and then tell me what vehicles I shouldn't be sourcing. So the great opportunity here is to combine the retail and wholesale capabilities that no. Other marketplace can provide with our combination of cargo.

Speaker Change: As in car offer you got a car offering you say you have a matrix setup to buy these vehicles did you realize consumer demand is up in these other types of vehicles you should be building your matrix around that vehicle acquisition strategy and helping them become more successful in a consultative way and on the dealer side of the consumer on the retail.

Sam Zales: Did you realize that consumer demand is up for these other types of vehicles? You should be building your matrix around that vehicle acquisition strategy and helping them become more successful in a consultative way. And on the dealer side of the consumer, on the retail side of the business, which vehicles should I be planning for? And, as Jason mentioned in his remarks, the next best deal rating, what price point allows me to get the highest opportunity of winning consumer eyeballs on the CarGurus platform while not giving away too much gross profit. So the entire process is looking at the synergies between CarOffer and CarGurus to maximize dealer profits. And that's what they're asking for. The feedback at our kickoff meeting, our sales kickoff meeting this year from dealers, was, the price of entry is I need your leads and connections. I have to have those because they're the best in the market.

Speaker Change: Side of the business is which vehicle should I be planning for and as Jason mentioned in his remarks next best deal rating what price point allows me to get to the highest opportunity winning consumer eyeballs on the cargo cargo was platform, but not giving away too much gross profit. So the entire process is looking at the.

Speaker Change: Synergies between car offer in car gurus to maximize dealer profits and that's what they're asking for that feedback at our kickoff meeting our sales kick off meeting this year from dealers was the price of entry as I need your leads and connections I have to have those because they are the best in the market, but can you also provide me with this data that helps me run.

Sam Zales: But can you also provide me with this data that helps me run my business more efficiently as a marketer and a sourcer of vehicles? And we think we have the only platform in the market to do so. All right. I appreciate it.

Speaker Change: My business more efficiently as a marketer and a sorcerer of vehicles and we think we have the only platform in the market to do so.

Speaker Change: I appreciate it thank you.

Ronald V. Josey: Thank you. Thank you. Our next question comes from the line of Ron Josey with Citi. Please proceed with your question. Great, thanks for taking the questions, guys. I had two.

Speaker Change: Thank you. Our next question comes from the line of Ron Josey with Citi. Please proceed with your question.

Ronald V. Josey: Thanks for taking the question guys I had two maybe Jason Sam with the multi product attach increasing 36% year over year talk to us more about the specific products, just driving that growth and any insights on overall attach rate of the dealers would be helpful. And then a quick clarification on just sell my car.

Jason Trevisan: Maybe Jason and Sam, with the multi-product attach rate increasing 36% year-over-year, could talk to us more about the specific products just driving that growth, and any insights on overall attach rates of the dealers would be helpful. And then a quick clarification on the Sell My Car top dealer offer. I know we're live in 18 metro areas and covering 40% of the U.S. population.

Ronald V. Josey: Popular offer them I know were alive, and 18 metro areas and covering 40% of the U S population talk to us about what needs to happen to go live and more metro areas. What what are we what what's the unlock here to maybe go nationwide. Thank you.

Ronald V. Josey: Talk to us about what needs to happen to go live in more metro areas. What's the key here to maybe go nationwide? Thank you. Hey Ron, it's Jason.

Ronald V. Josey: Hey, Ryan it's Jason so yeah, the the multi product attach rate I mean examples of other products would be digital deal is a key one highlight is another product that has.

Jason Trevisan: So yeah, the multiproduct attach rate, I mean, examples of other products would be the digital deal, the highlight is another product that has been particularly attracted to dealers lately. Geographic expansion is another as well.

Jason: Has been particularly good.

Jason: Attracted attracted to dealers lately geographic expansion is another as well and it's a lot of it is actually dovetails with what Sam was just saying which is that.

Jason Trevisan: And a lot of it actually dovetails with what Sam was just saying, which is that as we have more of these as we have multiple products, but then give more insights to help them know how to use some of these products for more specific purposes, whether it's to help Source Smarter, Source Cars Smarter, or Market Certain Types of Cars Differently. It all comes down to their volume and their margin, and so the, excuse me, the We're also, I think, being much smarter about how we think about package levels. And so that's not exactly multiproduct attached, but that's a cousin of it because we are providing some of these insights for higher-level packages, for dealers who are just much deeper into our platform and getting much more out. And Ron and Sam, I think you'll have heard this as a repetitive theme over the years we've talked, the top dealer offer expansion to the rest of the country, which we're excited about, but will always be deliberate We've said that about everything we've built here.

Jason: That as we have more of these as we have multiple products, but then give more insights to help them know how to use some of these products for more specific purposes, whether it's to help.

Jason: Source smarter sourced cars smarter or market certain types of cars differently. It all comes down to their volume and their margin.

Jason: And so the excuse me the portfolio of products were.

Jason: Building, coupled with the insights, we're giving them or helping them to optimize that we're awesome I think being much smarter about how we think about the package levels and so that's not exactly a multi product attach but that's oh.

Jason: <unk> of it.

Jason: Because we are providing some of these insights for higher level packages for.

Jason: For dealers, who are just much deeper into our platform and getting much more out of it.

Speaker Change: And Ryan and Sam I think you'll you'll have heard this is a repetitive theme over the years, we've talked the top dealer offer expansion to the rest of the country, which we're excited about but we'll always be deliberate about is based first on consumer experience. We said that about everything we felt here you knew what our NPS scores where in many of our products.

Sam Zales: You know what our MPS scores were, and many of our products, IMCO being one of them, we're measuring that, we're watching that to ensure an optimal consumer experience in this process. Remember, a consumer is choosing to bypass a white glove experience and saying, I'm going to get more money at that local dealership, but I want the experience to be high quality, high integrity, and consistent. Hence the use of this new intake tool that we're out there in the market with right now, which creates a seamless and consistent experience between all the dealers who use it. Allows the consumer to say, I understand why the price point might be different than what you first offered me, if that, if something is found at the local dealership using the same consistent tool set.

Speaker Change: So <unk> being one of them, we're measuring that we're watching that to ensure optimal consumer experience in this process remember of consumers choosing to bypass a white glove experience and saying I'm going to get more money at that local dealership, but I want the experience to be a high quality high integrity and consistent.

Speaker Change: Hence the use of this new intake tool that were out there in the market with right now, which creates a seamless and and consistent experience between all the dealers who use it allows the consumer to say I understand why the price points might be different than what you're first offered me if that if something is found at the local dealership and.

Speaker Change: Using the same consistent toolset. So one is consumer experience and making the highest possible number two is the dealer experience earlier question was what kind of close rates are we getting now what we're seeing is tremendously high close rates from those dealers, who are having consistent intake process for consumer acquisition of vehicles. They are.

Sam Zales: So one is the consumer experience in making as high a score as possible. Number two is the dealer experience. The earlier question was, what kind of close rates are we getting now? What we're seeing is tremendously high close rates from those dealers who have a consistent intake process for consumer acquisition of vehicles. There are a set of dealers who've joined the programs who don't have as consistent a regional approach.

Speaker Change: Set of dealers, who joined the program, who don't have as consistent a regional approach to one dealer retail location might have a different intake process than another one so your close rates will be different by each we want to make sure those are as consistent as possible, our consulting and helping those dealers to be as successful as possible.

Sam Zales: So one dealer retail location might have a different intake process than another one, so your close rates will be different at each. We want to make sure those are as consistent as possible.

Sam Zales: We're consulting with and helping those dealers to be as successful as possible, and the consistent results will say, okay, that ROI is high on your subscription program for top dealer offers. The last part I would say to you is our economics.

Speaker Change: And the consistent results will say, okay that ROI is high on your subscription program for top deal or offer the last part I would say to you is our economics. So we've gone out with pricing in the market that we think is reasonable but if the close rates continue as successfully as they are we might change the pricing. So the subscription might be too low right now before we had.

Sam Zales: So we've gone out with pricing in the market that we think is reasonable, but if the close rates continue as successfully as they are, we might change the pricing. So the subscription might be too low right now before we head to the rest of the market. But I'm not saying it is right now.

Speaker Change: So the rest of the market I'm not saying it is right now.

Speaker Change: But as we do that going forward, it's going to be really important for us to think about the economics of balanced ROI between the dealers access and what we get on our side of the car garage. So we're thinking about that pricing point, making sure when we do roll out nationally it's maximize for the win win for both sides of that that effort.

Sam Zales: But as we do that going forward, it's going to be really important for us to think about the economics of balanced ROI between the dealer's access and what we get on our side at CarGurus. So we're thinking about that price point and making sure when we do roll out nationally, it's maximized for the win-win for both sides of that effort. Thank you. Our next question comes from the line of John Colatoni with Jeff. Please proceed with your question. Thanks so much for the questions.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of John Cola, Tony with Jefferies. Please proceed with your question.

Speaker Change: Thanks, so much for the questions I wanted to ask about digital deal when thinking about the addressable market for digital deal are there any technical barriers of product investments that youre still working to address before expanding the offering across more dealerships and when thinking about the opportunity set for digital.

John Colatoni: I wanted to ask about Digital Deal. When thinking about the addressable market for Digital Deal, are there any technical barriers or product investments that you're still working to address before expanding the offering across more dealerships? And when thinking about the opportunity set for Digital Deal, are there certain types of dealerships that are less likely to adopt the product, or could you see every dealership partner adopting it over time? Thanks. Thanks, John. So we're always working to continue to make the digital deal a better consumer experience, a better dealer experience. But no, there's not really a structural or technical barrier to faster adoption there. There is some, I would say modest, onboarding required at the dealer. And, for really, sort of optimal results at the dealer, they do need to embrace things like hard pull financing, and they really need to, I would say, you know, change the sort of flow of leads and how their sales team handles the leads.

Speaker Change: Are there certain types of dealerships that are less likely to adopt the product or you could you see every dealership partner adopting it overtime.

Speaker Change: Thanks, John.

Speaker Change: So we're always working to.

Speaker Change: To make digital deal a better consumer experience better dealer experience, but no. There's not really there's no structural technical barrier to faster adoption there.

Speaker Change: There is.

Speaker Change: Some I would say modest onboarding required at the dealer.

Speaker Change: And and for really a sort of optimal results at the dealer they do need to embrace things like hard pole.

Speaker Change: Financing and they really need to I would say change the sort of flow of leads and how their sales team handles the leads.

John Colatoni: So for instance, it's not a good consumer experience if the consumer does this work on our site and then walks into a dealership, and the salesperson is not familiar with the digital deal and is not, you know, Leveraging all the information that that consumer has given. And so none of what I've mentioned is, you know, a big hill to climb at all.

Speaker Change: So for instance, if there really is not a good consumer experience if the consumer does this work on our site and then walks into the dealership and the salesperson is not familiar with digital deal and it's not.

Speaker Change: No.

Speaker Change: Leveraging all the information that that consumer has given.

Speaker Change: And so neither none of what I've mentioned is.

Speaker Change: You know a big hill to climb at all it's not even a big lift for the dealer, but it does require a little bit of change aside from that.

Jason Trevisan: It's not even a big lift for the dealer, but it does require a little bit of change. Aside from that, there's really not much. You know, consistent reasons why a dealer wouldn't adopt them. It does cost money. So some may be price sensitive, at where consumers say they want the process to be. They say they want to do more and more, and in a lot of cases, most of the transaction online. And so consumer sentiment is there, and we think that's where the market is headed. On the consumer side, we do have more work to do to make it a more obvious and seamless flow on our site. And so we are going to put more resources there so that it's easier to find, it's easier to do, and it's just more part of the center. Great, thanks so much. Thank you. Our next question comes from the line of Doug Arthur with Huber Research Park.

Speaker Change: There's not really.

Speaker Change: Consistent reasons, why a dealer wouldnt adopt it does cost money, so some maybe price sensitive to it.

Speaker Change: Scott.

Speaker Change: Are consumers say they won the process to be they say they want to do more and more and in lot of cases, most of the transaction online and so consumer sentiment is there and we think that's where the market is headed on the consumer side. We do have more work to do to make it more obvious and seamless flow on our site.

Speaker Change: And so we are going to put more resources. There so that it's easier to find it's easier to do and it's just more part of the central flow.

Speaker Change: Great. Thanks, so much.

Speaker Change: Thank you. Our next question comes from the line of Doug Arthur with Huber Research Partners. Please proceed with your question, yes, there's a lot of questions. So I'll just keep it to one just on a GAAP basis is the true up with the car offered close.

Douglas Middleton Arthur: Please proceed with your questions. Yeah, thanks. A lot of questions, but I'll just keep it at one. Just on a gap basis, is the true-up with the car offer closed? Is that done now, or are we? Screw-Ups in the Gap. We don't expect to see any true apps going forward. The transaction is closed, and so we recorded approximately 50 million share-based compensation in the fourth quarter related to the transaction. But that should be it. We don't expect anything going forward.

Douglas Middleton Arthur: Is that done now or are we going to see some lingering true ups in the GAAP numbers, let's say in Q1.

Douglas Middleton Arthur: Oh.

Speaker Change: We don't expect to see an interest going forward.

Douglas Middleton Arthur: Jackson has closed and so we recorded approximately 50 million in share based compensation in the fourth quarter related to the transaction, but that should be we don't expect anything going forward.

Elisa Palazzo: Okay, great. Thank you very much. Our next question comes from the line of Kunal Madhukar with UBS.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: Thank you. Our next question comes from the line of Kunal Madhu Kumar with UBS. Please proceed with your question.

Kunal Madhukar: Please proceed with your question. Hi, thanks a lot. This is Jason from EBS.

Speaker Change: Thanks, a lot. This is Jason on for Cornell from UBS. Thanks for squeezing me in I have a couple of questions. So first of all could you. Please double click into the recent trends you've seen within the deal a little deal that whole space and also unpack a little bit more of the value proposition and differentiation of car offer compared to our competitors.

Jason: Thanks for screwing me in. I have a couple of questions. So, first, could you please double-click on the recent trends you've seen within the dealer-to-dealer whole space and also unpack a little bit more the value proposition and differentiation of your car offer compared to the competitor's offerings? For instance, I was curious to hear more about what's driving your pricing for the car offer and the specifics of your customer base. And I will follow up. Sure, Jason. My name is Sam Zales.

Speaker Change: Offerings for instance, I was curious to hear more about what's driving your pack and public offer of.

Jason: Of your customer base and I have a follow up.

Jason: Sure, Jason It's Sam Zales Ah the value proposition is very simple and that is we've completely pioneered the industry in that as you know the wholesale market relies on an auction model for most of its business transactions today.

Sam Zales: The value proposition is very simple, and that is that we've completely pioneered the industry in that, as you know, the wholesale market relies on an auction model for most of its business transactions today. That is moving more digitally, and there are some players out there who are offering digital auctions. What CarOffer provides is a digital instant trade platform, which is very different, almost a stock exchange of vehicles a dealer would like to purchase and the price points of vehicles that a dealer would like to sell, creating a light capital model that brings a digital transaction and capability. It doesn't require a wholesale buyer or seller to sit at a timed auction and watch the vehicles go by.

Sam Zales: Moving more digitally and there are some players out there offering digital auctions. What car offer provides is a is a digital instead traded platform, which is very different almost a stock exchange.

Sam Zales: Vehicles, the dealer would like to purchase and the price points of dealers are vehicles that are dealer, we'd like to sell them their price points, creating a light capital model that brings a digital transaction that capability. It doesn't require a wholesale buyer or seller to sit at a time docs in and watched the vehicles go by.

Sam Zales: So it's a completely different and new and innovative solution in the marketplace. We've said that it works perfectly for larger scale acquirers of vehicles. It works for the larger players in the commercial space as well.

Sam Zales: So, it's a completely different and new and innovative solution in the marketplace.

Sam Zales: He said that it works perfectly for larger scale acquirers of vehicles. It worked for the the the larger players.

Sam Zales: Players in the commercial space as well in a down market, it's a new adaptive tool because it requires at a price point market thats going down a dealer community to utilize it and watch the vehicles and make sure. They are inspected to the levels were inspecting them the and to reduce the arbitration.

Sam Zales: In a down market, it's a new adoptive tool because it requires, in a price point market that's going down, a dealer community to utilize and watch the vehicles and make sure they're inspected to the levels we're inspecting them, and to reduce the arbitration potential of those programs. We talked about our operational improvements at CarOffer. We've done phenomenally on that front, and what we're seeing, though, is a business that Lisa mentioned up front. We're going to keep that business with a new leader intact. The reason we're so excited about owning the CarOffer business eight months before we were going to is that we are now running the business from the headquarters of CarGurus and with Zach Hallowell, a veteran digital wholesale leader, in place running that business.

Sam Zales: And potential of those programs, we talked about our operational improvements at car offer.

Sam Zales: We've done phenomenally on that front and what we're seeing though is a business that we that Lisa mentioned upfront, we're going to keep that business with a new leader intact. The reason, we're so excited about owning the car off our business eight months before we were going to is that we are now running the business from the headquarters of cargo routes and with Zack Hallow L. A veteran.

Sam Zales: Digital wholesale leader in place running that business. We're looking at product enhancements. We're looking at continued operational improvements that we've already succeeded at but are going to push further on and then they go to market focus which is we're turning our team from sellers into consultants, providing the inventory management tools.

Sam Zales: We're looking at product enhancements. We're looking at continued operational improvements that we've already succeeded in but are going to push further on. And then a go-to-market focus, which is we're turning our team from sellers into consultants, providing the inventory management tools, the consultation, and the AI-based predictive tools to help dealers engage in this platform more than they have over the last few quarters. And that's going to take us a couple of quarters to turn around.

Sam Zales: The consultation the AI based predictive tools to help dealers engaged in this platform more than they have over the last few quarters and that's going to take US a couple of quarters to turn around we're excited about it because you've got a unique tool set with a value proposition no. One else has we just have to operate that business with new leadership to take it forward.

Sam Zales: We're excited about it because you've got a unique tool set with a value proposition no one else has. We just have to operate that business with new leadership to take it forward. Thank you. There are no further questions at this time. I'd like to turn the floor back over to Jason Trevisan for closing comments.

Sam Zales: Thank you there are no further questions at this time I'd like to turn the floor back over to Jason to basin for closing comments.

Jason Trevisan: Thank you very much. And thanks to everyone who joined us this evening and for the thoughtful questions. I just want to wrap up by sharing how proud we are of our exceptional performance in Q4 and throughout 2023. And, probably most importantly, how well we think we're positioned for 2024.

Jason: Thank you very much and thanks to everyone, who joined US this evening and for the thoughtful questions I just wanted to wrap up by sharing how proud we are of our exceptional performance in Q4 and throughout 2023 and probably most importantly, how well we think we're positioned for 2024.

Jason Trevisan: I want to thank all of our employees globally, who have contributed so much to helping us become the number one digital destination for consumers and dealers to confidently and conveniently buy and sell any vehicle. So, thank you very much, everyone. Have a good evening. This concludes today's teleconference. You may disconnect your lines at this time. Goodbye. Thank you for your participation. The Bulletproof Executive 2013, Class A The Bulletproof Executive 2013, www.thevenusproject.com www.globalonenessproject.org, The Bulletproof Executive 2013

Jason: Thank all of our employees globally.

Jason: Who have contributed so much to helping us become the number one digital destination for consumers and dealers to confidently and conveniently buy and sell any vehicle. So thank you very much everyone have a good evening.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time by.

Speaker Change: Thank you for your participation.

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