CarGurus, Inc.

Previous wording

CarGurus is a multinational, online automotive platform for buying and selling vehicles that is building upon its industry-leading listings marketplace with both digital retail solutions and the CarOffer online wholesale platform. The CarGurus platform gives consumers the confidence to purchase and/or sell a vehicle either online or in person, and it gives dealerships the power to accurately price, effectively market, instantly acquire, and quickly sell vehicles, all with a nationwide reach. We use proprietary technology, search algorithms, and data analytics to bring trust, transparency, and competitive pricing to the automotive shopping experience.

Current wording

CarGurus is a multinational, online automotive platform for buying and selling vehicles that is building upon its industry-leading listings marketplace with digital retail solutions. The CarGurus platform gives consumers the confidence to purchase and/or sell a vehicle either online or in person, and it gives dealerships the power to accurately price, effectively market, instantly acquire, and quickly sell vehicles, all with a nationwide reach. We use proprietary technology, search algorithms, and data analytics to bring trust, transparency, and competitive pricing to the automotive shopping experience.

Previous wording

We derive our revenue from marketplace revenue, wholesale revenue, and product revenue. Marketplace revenue is included in the U.S. Marketplace segment and Other category of segment reporting. Wholesale revenue and product revenue are included in the Digital Wholesale segment. We generate marketplace revenue from (i) dealer subscriptions to our Listings packages and Real-time Performance Marketing, or RPM, our digital advertising suite, Digital Retail, and Sell My Car - Top Dealer Offers, (ii) advertising revenue from auto manufacturers and other auto-related brand advertisers, and (iii) revenue from partnerships with financing services companies. We generate wholesale revenue primarily from (x) transaction fees earned from the purchase and sale of vehicles between dealers, or Dealer-to-Dealer transactions, (y) transaction fees earned from the sale of vehicles to dealers that we acquire at other marketplaces, and (z) transaction fees earned from performing inspection and transportation services, inclusive of Dealer-to-Dealer transactions, other marketplace-to-dealer transactions, and IMCO transactions (as defined below). We generate product revenue primarily from (A) aggregate proceeds received from the sale of vehicles to dealers that were acquired directly from customers, or Sell My Car - Instant Max Cash Offer, or IMCO transactions, and (B) proceeds received from the sale of vehicles that were acquired through arbitration.

Current wording

We derive our revenue from marketplace revenue, wholesale revenue, and product revenue. Marketplace revenue is included in the U.S. Marketplace segment and Other category of segment reporting. Wholesale revenue and product revenue are included in the Digital Wholesale segment. We generate marketplace revenue from (i) dealer subscriptions to our Listings packages, Real-time Performance Marketing, or RPM, our digital advertising suite, Digital Retail, and Sell My Car - Top Dealer Offers, (ii) advertising revenue from auto manufacturers and other auto-related brand advertisers, and (iii) revenue from partnerships with financing services companies. We generate wholesale revenue primarily from (x) transaction fees earned from the purchase and sale of vehicles between dealers, or Dealer-to-Dealer transactions, (y) transaction fees earned from the sale of vehicles to dealers that we acquire at other marketplaces, and (z) transaction fees earned from performing inspection and transportation services, inclusive of Dealer-to-Dealer transactions, other marketplace-to-dealer transactions, and IMCO transactions (as defined below). We generate product revenue primarily from (A) aggregate proceeds received from the sale of vehicles to dealers that were acquired directly from customers, or Sell My Car - Instant Max Cash Offer, or IMCO transactions, and (B) proceeds received from the sale of vehicles that were acquired through arbitration.

Previous wording

For the three months ended March 31, 2025, we generated net income of $39.0 million and Adjusted EBITDA, a non-GAAP measure, of $66.3 million, compared to net income of $21.3 million and Adjusted EBITDA of $50.4 million for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, we generated revenue of $234.0 million, a 7% increase from $218.7 million of revenue for the three months ended June 30, 2024. For the three months ended June 30, 2025, we generated net income of $22.3 million and Adjusted EBITDA, a non-GAAP measure, of $77.3 million, compared to net loss of $68.7 million and Adjusted EBITDA of $55.6 million for the three months ended June 30, 2024.

Previous wording

We define Transactions within the Digital Wholesale segment as the number of vehicles processed from car dealers, consumers, and other marketplaces through the CarOffer website within the defined period. Transactions consists of each unique vehicle (based on vehicle identification number) that reaches“sold and invoiced” status on the CarOffer website within the defined period, including vehicles sold to car dealers, vehicles sold at third-party auctions, vehicles ultimately sold to a different buyer, and vehicles that are returned to their owners without completion of a sale transaction. We exclude vehicles processed within CarOffer’s intra-group trading solution (Group Trade) from the definition of Transactions, and we only count any unique vehicle once even if it reaches sold status multiple times. The Digital Wholesale segment includes Dealer-to-Dealer transactions and IMCO transactions. We view Transactions as a key business metric, and we believe it provides useful information to investors, because it provides insight into growth and revenue for the Digital Wholesale segment. Transactions drive a significant portion of Digital Wholesale segment revenue. We believe growth in Transactions demonstrates consumer and dealer utilization and our market share penetration in the Digital Wholesale segment.

Current wording

We define Transactions within the Digital Wholesale segment as the number of vehicles processed from car dealers, consumers, and other marketplaces through the CarOffer website within the defined period. Transactions consists of each unique vehicle (based on vehicle identification number) that reaches“sold and invoiced” status on the CarOffer website within the defined period, including vehicles sold to car dealers, vehicles sold at third-party auctions, vehicles ultimately sold to a different buyer, and vehicles that are returned to their owners without completion of a sale transaction. We exclude vehicles processed within CarOffer’s intra-group trading solution (Group Trade) from the definition of Transactions, and we only count any unique vehicle once even if it reaches sold status multiple times. The Digital Wholesale segment includes Dealer-to-Dealer transactions and IMCO transactions. We view Transactions as a key business metric, and we believe it provides useful information to investors, because it provides insight into growth and revenue for the Digital Wholesale segment. Transactions drive a significant portion of Digital Wholesale segment revenue. We believe growth in Transactions demonstrates consumer and dealer utilization and our market share penetration in the Digital Wholesale segment. Beginning in the second half of 2025 we expect Transactions to decrease due to the wind-down of CarOffer, including the CarOffer Transactions Business, and cease over time.

Previous wording

We define QARSD, which is measured at the end of a fiscal quarter, as the marketplace revenue primarily from subscriptions to our Listings packages and RPM, our digital advertising suite, and other digital add-on products during that trailing quarter divided by the average number of paying dealers in that marketplace during the quarter. We calculate the average number of paying dealers for a period by adding the number of paying dealers at the end of such period and the end of the prior period and dividing by two. This information is important to us, and we believe it provides useful information to investors, because we believe that our ability to grow QARSD is an indicator of the value proposition of our products and the return on investment, or ROI, that our paying dealers realize from our products. In addition, increases in QARSD, which we believe reflect the value of exposure to our engaged audience in relation to subscription cost, are driven in part by our ability to grow the volume of connections to our users and the quality of those connections, which result in increased opportunity to upsell package levels and cross-sell additional products to our paying dealers.

Current wording

We define QARSD, which is measured at the end of a fiscal quarter, as the marketplace revenue primarily from subscriptions to our Listings packages, RPM, our digital advertising suite, and other digital add-on products during that trailing quarter divided by the average number of paying dealers in that marketplace during the quarter. We calculate the average number of paying dealers for a period by adding the number of paying dealers at the end of such period and the end of the prior period and dividing by two. This information is important to us, and we believe it provides useful information to investors, because we believe that our ability to grow QARSD is an indicator of the value proposition of our products and the return on investment, or ROI, that our paying dealers realize from our products. In addition, increases in QARSD, which we believe reflect the value of exposure to our engaged audience in relation to subscription cost, are driven in part by our ability to grow the volume of connections to our users and the quality of those connections, which result in increased opportunity to upsell package levels and cross-sell additional products to our paying dealers.

Previous wording

We define Adjusted EBITDA as net income, adjusted to exclude: depreciation and amortization, stock‑based compensation expense, transaction-related expenses, other income, net, and provision for income taxes.

Current wording

We define Adjusted EBITDA as net income (loss), adjusted to exclude: depreciation and amortization, impairments, stock‑based compensation expense, transaction-related expenses, other income, net, and provision for (benefit from) income taxes.

Previous wording

Adjusted EBITDA excludes the provision for income taxes; and

Current wording

Adjusted EBITDA excludes the provision for (benefit from) income taxes; and

Previous wording

For the three months ended March 31, 2025 and 2024, the following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable measure calculated in accordance with GAAP for each of the periods presented.

Current wording

For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable measure calculated in accordance with GAAP for each of the periods presented.

Previous wording

Wholesale cost of revenue includes expenses related to supporting and hosting Digital Wholesale service offerings, including Dealer-to-Dealer transactions and vehicles sold to dealers acquired at other marketplaces on the CarOffer Matrix. These expenses include vehicle transportation and inspection expenses; net losses on vehicles related to guarantees offered to dealers through Dealer-to-Dealer transactions; personnel and related expenses for employees directly involved in the fulfillment and support of transactions, including salaries, benefits, incentive compensation, and stock-based compensation; third-party service provider expenses; amortization of developed technology; amortization of capitalized website development; and allocated overhead expenses.

Current wording

Wholesale cost of revenue includes expenses related to supporting and hosting Digital Wholesale service offerings, including Dealer-to-Dealer transactions and vehicles sold to dealers acquired at other marketplaces on the CarOffer Matrix. These expenses include vehicle transportation and inspection expenses; net losses on vehicles related to guarantees offered to dealers through Dealer-to-Dealer transactions; personnel and related expenses for employees directly involved in the fulfillment and support of transactions, including salaries, benefits, incentive compensation, and stock-based compensation; third-party service provider expenses; amortization of developed technology; amortization and impairment of capitalized website development; and allocated overhead expenses.

Previous wording

Sales and marketing expense consists primarily of personnel and related expenses for our sales and marketing team, including salaries, benefits, incentive compensation, commissions, and stock-based compensation; expenses associated with consumer marketing, such as traffic acquisition, brand building, and public relations activities; expenses associated with dealer marketing, such as content marketing, customer and promotional events, and industry events; consulting services; software subscription expenses; travel expenses; amortization of capitalized hosting arrangements; and allocated overhead expenses. A portion of our commissions that are related to obtaining a new contract are capitalized and amortized over the estimated benefit period of customer relationships. Other than commissions amortization, all other sales and marketing expenses are expensed as incurred. We expect sales and marketing expense to fluctuate from quarter to quarter due to seasonality and as we respond to changes in the macroeconomic and competitive landscapes affecting our existing dealers, consumer audience, and brand awareness.

Current wording

Sales and marketing expense consists primarily of personnel and related expenses for our sales and marketing team, including salaries, benefits, incentive compensation, commissions, and stock-based compensation; expenses associated with consumer marketing, such as traffic acquisition, brand building, and public relations activities; expenses associated with dealer marketing, such as content marketing, customer and promotional events, and industry events; consulting services; software subscription expenses; travel expenses; amortization of capitalized hosting arrangements; and allocated overhead expenses. A portion of our commissions that are related to obtaining a new contract are capitalized and amortized over the estimated benefit period of customer relationships. Other than commissions amortization, all other sales and marketing expenses are expensed as incurred. We expect sales and marketing expense to fluctuate from quarter to quarter due to seasonality and as we respond to changes in the macroeconomic and competitive landscapes affecting our existing dealers, consumer audience, and brand awareness, inclusive of an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.

Previous wording

Product, technology, and development expense consists primarily of personnel and related expenses for our research and development team, including salaries, benefits, incentive compensation, and stock-based compensation; software subscription expenses; consulting services; and allocated overhead expenses. Other than website development, internal-use software, and hosting arrangement expenses, research and development expenses are expensed as incurred. We expect product, technology, and development expense to fluctuate from quarter to quarter as we invest in additional engineering resources to develop innovative new solutions and make improvements to our existing platform.

Current wording

Product, technology, and development expense consists primarily of personnel and related expenses for our research and development team, including salaries, benefits, incentive compensation, and stock-based compensation; software subscription expenses; consulting services; and allocated overhead expenses. Other than website development, internal-use software, and hosting arrangement expenses, research and development expenses are expensed as incurred. We expect product, technology, and development expense to fluctuate from quarter to quarter as we invest in additional engineering resources to develop innovative new solutions and make improvements to our existing platform, inclusive of an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.

Previous wording

General and administrative expense consists primarily of personnel and related expenses for our executive, finance, legal, people and talent, and administrative teams, including salaries, benefits, incentive compensation, and stock-based compensation; expenses associated with professional fees for audit, tax, external legal, and consulting services; payment processing and billing expenses; insurance expenses; software subscription expenses; and allocated overhead expenses. General and administrative expense is expensed as incurred. We expect general and administrative expense to increase as we continue to scale our business.

Current wording

General and administrative expense consists primarily of personnel and related expenses for our executive, finance, legal, people and talent, and administrative teams, including salaries, benefits, incentive compensation, and stock-based compensation; expenses associated with professional fees for audit, tax, external legal, and consulting services; payment processing and billing expenses; insurance expenses; software subscription expenses; and allocated overhead expenses. General and administrative expense is expensed as incurred. We expect general and administrative expense to increase as we continue to scale our business, offset by an expected decrease in expense after the wind-down of CarOffer, including the CarOffer Transactions Business, is completed.

Previous wording

The provision for income taxes consists of federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate.

Current wording

The provision for (benefit from) income taxes consists of federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate. For the three and six months ended June 30, 2025, a provision for income taxes was recognized as a result of the consolidated taxable income position. For the three and six months ended June 30, 2024, a benefit from income taxes was recognized as a result of the discrete tax benefit associated with the impairment charge despite our consolidated taxable income position.

Previous wording

For the three months ended March 31, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements were as follows:

Current wording

For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements were as follows:

Previous wording

For the three months ended March 31, 2025 and 2024, our segment revenue and our segment income (loss) from operations were as follows:

Current wording

For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, our segment revenue and our segment income (loss) from operations were as follows:

Previous wording

For the three months ended March 31, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements as a percentage of total revenue were as follows (amounts in the table below may not sum due to rounding):

Current wording

For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the Unaudited Condensed Consolidated Income Statements as a percentage of total revenue were as follows (amounts in the table below may not sum due to rounding):

Previous wording

For the three months ended March 31, 2025 and 2024, our segment revenue as a percentage of total revenue and our segment income (loss) from operations as a percentage of segment revenue were as follows (amounts in the table below may not sum due to rounding):

Current wording

For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, our segment revenue as a percentage of total revenue and our segment income (loss) from operations as a percentage of segment revenue were as follows (amounts in the table below may not sum due to rounding):

Previous wording

Marketplace revenue increased $25.0 million, or 13%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 94% of total revenue for the three months ended March 31, 2025, compared to 87% of total revenue for the three months ended March 31, 2024. The increase was due primarily to an increase in Listings revenue, inclusive of certain add-on products, as a result of growth in QARSD, which was driven by signing on new dealers at market rates and revenue expansion through subscription tier upgrades or product adoption. The increase was also due in part to an increase in advertising revenue due primarily to increased spend by advertisers related to new and existing campaigns.

Current wording

Marketplace revenue increased $26.8 million, or 14%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 95% of total revenue for the three months ended June 30, 2025, compared to 89% of total revenue for the three months ended June 30, 2024. The increase was due primarily to an increase in Listings revenue, as a result of strong growth in both paying dealer count and QARSD. We have increased wallet share across our dealer base, driven by upgrades, broader adoption of add-on products, and like-for-like price increases. The increase was also due in part to an increase in advertising revenue due primarily to increased spend by advertisers related to new and existing campaigns.

Previous wording

Wholesale revenue decreased $8.4 million, or 52%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 3% of total revenue for the three months ended March 31, 2025, compared to 7% of total revenue for the three months ended March 31, 2024. The decrease was due primarily to a 49% decrease in Transactions, which includes Dealer-to-Dealer transactions and IMCO transactions, to 5,209 for the three months ended March 31, 2025, compared to 10,302 for the three months ended March 31, 2024.

Current wording

Wholesale revenue decreased $6.8 million, or 52%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 3% of total revenue for the three months ended June 30, 2025, compared to 6% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a 55% decrease in Transactions, which includes Dealer-to-Dealer transactions and IMCO transactions, to 3,955 for the three months ended June 30, 2025, compared to 8,778 for the three months ended June 30, 2024.

Previous wording

Product revenue decreased $7.3 million, or 58%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 2% of total revenue for the three months ended March 31, 2025, compared to 6% of total revenue for the three months ended March 31, 2024. The decrease was due primarily to a decrease in proceeds received from the sale of vehicles through IMCO transactions and proceeds received from the sale of vehicles acquired through arbitration, as a result of lower Transaction volume.

Current wording

Product revenue decreased $4.6 million, or 45%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 2% of total revenue for the three months ended June 30, 2025, compared to 5% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a decrease in proceeds received from the sale of vehicles through IMCO transactions and proceeds received from the sale of vehicles acquired through arbitration, as a result of lower Transaction volume.

Previous wording

U.S. Marketplace segment revenue increased $22.2 million, or 13%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 87% of total revenue for the three months ended March 31, 2025, compared to 80% of total revenue for the three months ended March 31, 2024. The increase was due primarily to a $25.0 million increase in marketplace revenue, as described above.

Current wording

U.S. Marketplace segment revenue increased $22.6 million, or 13%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 87% of total revenue for the three months ended June 30, 2025, compared to 82% of total revenue for the three months ended June 30, 2024. The increase was due primarily to a $26.8 million increase in marketplace revenue, as described above.

Previous wording

Digital Wholesale segment revenue, which is comprised of wholesale revenue and product revenue, decreased $15.7 million, or 55%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 6% of total revenue for the three months ended March 31, 2025, compared to 13% of total revenue for the three months ended March 31, 2024. The decrease in Digital Wholesale segment revenue was due to a $8.4 million decrease in wholesale revenue and a $7.3 million decrease in product revenue, as described above.

Current wording

Digital Wholesale segment revenue, which is comprised of wholesale revenue and product revenue, decreased $11.5 million, or 49%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 5% of total revenue for the three months ended June 30, 2025, compared to 11% of total revenue for the three months ended June 30, 2024. The decrease in Digital Wholesale segment revenue was due to a $6.8 million decrease in wholesale revenue and a $4.6 million decrease in product revenue, as described above.

Previous wording

Wholesale cost of revenue decreased $8.1 million, or 57%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 3% of total revenue for the three months ended March 31, 2025, compared to 7% of total revenue for the three months ended March 31, 2024. The decrease was due primarily to a $4.4 million decrease in transportation expense, inspection expense, and data fees as a result of lower Transaction volume. The decrease was also due in part to a $1.1 million decrease in amortization related to the end of the CG Buy Online pilot during the third quarter of 2024 and a $0.9 million decrease in amortization related to the CarOffer acquired developed technology intangible asset as it became fully amortized during the first quarter of 2024.

Current wording

Wholesale cost of revenue decreased $4.3 million, or 34%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 4% of total revenue for the three months ended June 30, 2025, compared to 6% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a $3.9 million decrease in transportation expense, inspection expense, and data and other transaction fees as a result of lower Transaction volume. The decrease was also due in part to a $2.2 million decrease in amortization, due primarily to the end of the CG Buy Online pilot during the third quarter of 2024, as well as a decrease in amortization of capitalized website development due to a project that became fully amortized in 2024. The decrease was offset in part by a $2.7 million increase in impairment of capitalized website development costs. For further discussion of impairments in the CarOffer reporting unit, refer to Note 6 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Previous wording

Product cost of revenue decreased $7.2 million, or 59%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 2% of total revenue for the three months ended March 31, 2025, compared to 6% of total revenue for the three months ended March 31, 2024. The decrease was due primarily to a decrease in expenses related to vehicles sold to dealers through IMCO transactions and related to vehicles sold to dealers acquired through arbitration, as a result of lower Transaction volume.

Current wording

Product cost of revenue decreased $4.7 million, or 45%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 2% of total revenue for the three months ended June 30, 2025, compared to 5% of total revenue for the three months ended June 30, 2024. The decrease was due primarily to a decrease in expenses related to vehicles sold to dealers through IMCO transactions and related to vehicles sold to dealers acquired through arbitration as a result of lower Transaction volume.

Previous wording

Product, technology, and development expense increased $0.7 million, or 2%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase was due primarily to a $1.1 million increase in salaries and employee-related expense due primarily to higher compensation for newly hired employees, increased respective payroll tax expense, and bonus attainment. The increase was offset in part by a $0.8 million decrease in rent and facilities expense due to the expiration of the leases of office space at 2 Canal Park and at 55 Cambridge Parkway.

Current wording

Sales and marketing expense increased $2.0 million, or 2%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase was due primarily to a $4.2 million increase in advertising and marketing expense for our brand awareness campaigns. The increase was offset in part by a $1.3 million decrease in salaries and employee-related expenses due primarily to changes in headcount. The increase was also offset in part by a $0.7 million decrease in rent expense due to the expiration of the leases of office space at 55 Cambridge Parkway and 2 Canal Park.

Previous wording

General and administrative expense decreased $1.3 million, or 5%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease was due primarily to a $2.3 million decrease in stock-based compensation, due primarily to completed vesting of existing awards and forfeitures from employee departures, partially offset by new grants. The decrease was offset in part by a $1.0 million increase in indirect tax expense.

Current wording

General and administrative expense decreased $0.4 million, or 1%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The decrease was due primarily to a $1.8 million decrease in stock-based compensation, due primarily to completed vesting of existing awards and forfeitures from employee departures, partially offset by new grants. The decrease was offset in part by a $0.6 million increase in consultant and recruiting fees and a $0.5 million increase in payment processing expenses.

Previous wording

Depreciation and amortization expense increased $1.4 million, or 51%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase was due primarily to a $1.9 million increase in depreciation due primarily to assets placed in service related to the 1001 Boylston Street lease, offset in part by assets related to the expiration of the lease of office space at 55 Cambridge Parkway becoming fully depreciated during the three months ended March 31, 2025, as well as the CarOffer customer relationships intangible asset in the Digital Wholesale segment becoming fully amortized during the three months ended March 31, 2024.

Current wording

Depreciation and amortization expense increased $1.9 million, or 85%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase was due primarily to a $2.1 million increase in depreciation due primarily to assets placed in service associated with the 1001 Boylston Street lease.

Previous wording

U.S. Marketplace segment income from operations increased $15.6 million, or 45%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, and represented 25% of U.S. Marketplace segment revenue for the three months ended March 31, 2025, compared to 20% of U.S. Marketplace segment revenue for the three months ended March 31, 2024. The increase was due to an increase in revenue of $22.2 million, a decrease in cost of revenue of $0.6 million, and an increase in operating expenses of $7.2 million.

Current wording

U.S. Marketplace segment income from operations increased $16.7 million, or 40%, in the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and represented 29% of U.S. Marketplace segment revenue for the three months ended June 30, 2025, compared to 23% of U.S. Marketplace segment revenue for the three months ended June 30, 2024. The increase was due to an increase in revenue of $22.6 million, an increase in cost of revenue of $1.9 million, and an increase in operating expenses of $4.0 million.

Previous wording

Sales and marketing expense increased $4.4 million, or 5%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase was due primarily to a $3.9 million increase in advertising and marketing expense for our brand awareness campaigns as well as for our performance marketing vendors. The increase in sales and marketing expense was also due in part to a $0.6 million increase in commissions expense due to an increase in marketplace revenue, offset in part by an increase in capitalized commissions.

Current wording

Sales and marketing expense increased $6.5 million, or 4%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase was due primarily to an $8.0 million increase in advertising and marketing expense for our brand awareness campaigns and our performance marketing vendors. The increase in sales and marketing expense was offset in part by a $1.5 million decrease in rent expense, due to the expiration of the leases of office space at 55 Cambridge Parkway and 2 Canal Park.

Previous wording

Total other income, net decreased $0.6 million, or 18%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The $0.8 million decrease in interest income was due primarily to the sale of interest-bearing short-term investments during the three months ended March 31, 2024.

Current wording

Total other income, net decreased $1.2 million, or 18%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The $1.1 million decrease in interest income was due primarily to the sale of interest-bearing short-term investments during the three months ended March 31, 2024. Other income, net was relatively flat for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Previous wording

As of March 31, 2025 and December 31, 2024, our principal sources of liquidity were cash and cash equivalents of $172.9 and $304.2 million, respectively. As of March 31, 2025, our borrowing capacity under the 2022 Revolver (as defined below) was $390.1 million.

Current wording

As of June 30, 2025 and December 31, 2024, our principal sources of liquidity were cash and cash equivalents of $231.2 million and $304.2 million, respectively. As of June 30, 2025, our borrowing capacity under the 2022 Revolver (as defined below) was $390.6 million.

Previous wording

During the three months ended March 31, 2025 and 2024, our cash flows from operating, investing, and financing activities, as reflected in the Unaudited Condensed Consolidated Statements of Cash Flows, were as follows:

Current wording

During the six months ended June 30, 2025 and 2024, our cash flows from operating, investing, and financing activities, as reflected in the Unaudited Condensed Consolidated Statements of Cash Flows, were as follows:

Previous wording

Our operations have been financed primarily from operating activities. During the three months ended March 31, 2025 and 2024, we generated cash from operating activities of $67.9 million and $52.0 million, respectively.

Current wording

Our operations have been financed primarily from operating activities. During the six months ended June 30, 2025 and 2024, we generated cash from operating activities of $141.0 million and $123.6 million, respectively.

Previous wording

On September 26, 2022, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and collateral agent and an L/C Issuer (as defined in the Credit Agreement), and the other lenders, L/C Issuers, and parties thereto from time to time, or the Credit Agreement. The Credit Agreement consists of a revolving credit facility, or the 2022 Revolver, which allows us to borrow up to $400.0 million, $50.0 million of which may be comprised of a letter of credit sub-facility, or 2022 Revolver Sub-facility. The borrowing capacity under the Credit Agreement may be increased in accordance with the terms and subject to the adjustments as set forth in the Credit Agreement. Specifically, the borrowing capacity may be increased by an amount up to the greater of $250.0 million or 100% of Four Quarter Consolidated EBITDA (as defined in the Credit Agreement) if certain criteria are met and subject to certain restrictions. Any such increase requires lender approval. Proceeds of any borrowings may be used for general corporate purposes. The 2022 Revolver is scheduled to mature on September 26, 2027. As of March 31, 2025 and December 31, 2024, there were no borrowings and $9.9 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.1 million.

Current wording

On September 26, 2022, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and collateral agent and an L/C Issuer (as defined in the Credit Agreement), and the other lenders, L/C Issuers, and parties thereto from time to time, or the Credit Agreement. The Credit Agreement consists of a revolving credit facility, or the 2022 Revolver, which allows us to borrow up to $400.0 million, $50.0 million of which may be comprised of a letter of credit sub-facility, or 2022 Revolver Sub-facility. The borrowing capacity under the Credit Agreement may be increased in accordance with the terms and subject to the adjustments as set forth in the Credit Agreement. Specifically, the borrowing capacity may be increased by an amount up to the greater of $250.0 million or 100% of Four Quarter Consolidated EBITDA (as defined in the Credit Agreement) if certain criteria are met and subject to certain restrictions. Any such increase requires lender approval. Proceeds of any borrowings may be used for general corporate purposes. The 2022 Revolver is scheduled to mature on September 26, 2027. As of June 30, 2025, there were no borrowings and $9.4 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.6 million. As of December 31, 2024, there were no borrowings and $9.9 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.1 million.

Previous wording

We believe that our existing sources of liquidity, including access to the 2022 Revolver, will be sufficient to fund our operations for at least the next 12 months from the date of the filing of this Quarterly Report. Our future capital requirements will depend on many factors, including our revenue; expenses associated with our sales and marketing activities and the support of our product, technology, and development efforts; payments received in advance from a third-party transaction processor; activity under the 2025 Share Repurchase Program (as defined below); and our investments in international markets. Cash from operations could also be affected by various risks and uncertainties, including but not limited to macroeconomic effects and other risks detailed more specifically in the “Risk Factors” section in Part I, Item 1A in our Annual Report and in the “Risk Factors” section in Part II, Item 1A in this Quarterly Report.

Current wording

We believe that our existing sources of liquidity, including access to the 2022 Revolver, will be sufficient to fund our operations for at least the next 12 months from the date of the filing of this Quarterly Report. Our future capital requirements will depend on many factors, including our revenue; expenses associated with our sales and marketing activities and the support of our product, technology, and development efforts; payments received in advance from a third-party transaction processor; activity under the 2025 Share Repurchase Program (as defined below); and our investments in international markets. In addition, our liquidity could be impacted by risks associated with the wind-down of CarOffer, including the loss of future cash flows and wind-down and exit costs. Cash from operations could also be affected by various risks and uncertainties, including but not limited to macroeconomic effects and other risks detailed more specifically in the “Risk Factors” section in Part I, Item 1A in our Annual Report and in the “Risk Factors” section in Part II, Item 1A in this Quarterly Report.

Previous wording

On November 7, 2024, we announced that our Board of Directors authorized a share repurchase program, or the 2025 Share Repurchase Program, pursuant to which we may, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $200.0 million. Share repurchases under the 2025 Share Repurchase Program may be made through a variety of methods, including but not limited to open market purchases, privately negotiated transactions, and transactions that may be effected pursuant to one or more plans under Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The 2025 Share Repurchase Program does not obligate us to repurchase any minimum dollar amount or number of shares. The 2025 Share Repurchase Program has an effective date of January 1, 2025, and an expiration date of December 31, 2025, and prior to its expiration may be modified, suspended, or discontinued by our Board of Directors at any time without prior notice. All repurchased shares under the 2025 Share Repurchase Program will be retired. We have funded share repurchases and expect to continue to fund share repurchases under the 2025 Share Repurchase Program through cash on hand and cash generated from operations. During the three months ended March 31, 2025, we repurchased and retired 5,919,435 shares of our Class A common stock for $184.2 million, exclusive of commissions and excise tax, at an average cost of $31.12 per share under the 2025 Share Repurchase Program. As of March 31, 2025, we had remaining authorization to purchase up to $15.8 million of our Class A common stock under the 2025 Share Repurchase Program.

Current wording

On November 7, 2024, we announced that our Board of Directors authorized a share repurchase program, or the Original 2025 Share Repurchase Program, pursuant to which we may, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $200.0 million. On August 7, 2025, we announced that our Board of Directors amended the Original 2025 Share Repurchase Program to increase the authorization by an additional $150.0 million, for a total authorization to purchase shares of our Class A common stock for an aggregate purchase price not to exceed $350.0 million, and extended the expiration of the Original 2025 Share Repurchase Program from December 31, 2025 to July 31, 2026, or as amended, the 2025 Share Repurchase Program. Share repurchases under the 2025 Share Repurchase Program may be made through a variety of methods, including but not limited to open market purchases, privately negotiated transactions, and transactions that may be effected pursuant to one or more plans under Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The 2025 Share Repurchase Program does not obligate us to repurchase any minimum dollar amount or number of shares. Prior to its expiration, the 2025 Share Repurchase Program may be modified, suspended, or discontinued by our Board of Directors at any time without prior notice. All repurchased shares under the 2025 Share Repurchase Program will be retired. We have funded share repurchases and expect to continue to fund share repurchases under the 2025 Share Repurchase Program through cash on hand and cash generated from operations. During the three months ended June 30, 2025, we repurchased and retired 11,004 shares of our Class A common stock for $0.3 million, exclusive of commissions and excise tax, at an average cost of $29.89 per share under the Original 2025 Share Repurchase Program. During the six months ended June 30, 2025, we repurchased and retired 5,930,439 shares of our Class A common stock for $184.5 million, exclusive of commissions and excise tax, at an average cost of $31.12 per share under the Original 2025 Share Repurchase Program. As of June 30, 2025, we had remaining authorization to purchase up to $15.5 million of our Class A common stock under the Original 2025 Share Repurchase Program. As of August 7, 2025, we had remaining authorization to purchase up to $165.5 million of our Class A common stock under the 2025 Share Repurchase Program.

Previous wording

On November 7, 2023, we announced that our Board of Directors authorized a share repurchase program, or the 2024 Share Repurchase Program, pursuant to which we could, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $250.0 million. The 2024 Share Repurchase Program expired on December 31, 2024. All repurchased shares of our Class A common stock under the 2024 Share Repurchase Program were retired. We funded share repurchases under the 2024 Share Repurchase Program through cash on hand and cash generated from operations. During the three months ended March 31, 2024, we repurchased and retired 3,538,194 shares of our Class A common stock for $81.1 million, exclusive of commissions and excise tax, at an average cost of $22.91 per share under the 2024 Share Repurchase Program.

Current wording

On November 7, 2023, we announced that our Board of Directors authorized a share repurchase program, or the 2024 Share Repurchase Program, pursuant to which we could, from time to time, purchase shares of our Class A common stock for an aggregate purchase price not to exceed $250.0 million. The 2024 Share Repurchase Program expired on December 31, 2024. All repurchased shares of our Class A common stock under the 2024 Share Repurchase Program were retired. We funded share repurchases under the 2024 Share Repurchase Program through cash on hand and cash generated from operations. During the three months ended June 30, 2024, we repurchased and retired 2,654,807 shares of our Class A common stock for $61.4 million, exclusive of commissions and excise tax, at an average cost of $23.11 per share under the 2024 Share Repurchase Program. During the six months ended June 30, 2024, we repurchased and retired 6,193,001 shares of our Class A common stock for $142.4 million, exclusive of commissions and excise tax, at an average cost of $23.00 per share under the 2024 Share Repurchase Program.

Previous wording

Net cash used in investing activities of $7.6 million during the three months ended March 31, 2025, was due to $5.4 million in capitalization of website development costs related to continued investments on our product offerings and $2.2 million in purchases of property and equipment related to internal-use software, as well as our headquarters at 1001 Boylston Street.

Current wording

Net cash used in investing activities of $15.5 million during the six months ended June 30, 2025, was due to $11.7 million in capitalized website development costs related to continued investments in our product offerings, and $3.8 million in purchases of property and equipment, primarily related to additions in capitalized internal-use software.

Previous wording

Net cash used in investing activities of $13.1 million during the three months ended March 31, 2024, was due primarily to $28.7 million of purchases of property and equipment and $5.5 million of capitalization of website development costs, offset in part by $20.7 million of sales of short-term investments, net of purchases.

Current wording

Net cash used in investing activities of $44.4 million during the six months ended June 30, 2024, was due primarily to $54.6 million in purchases of property and equipment primarily related to our new headquarters at 1001 Boylston Street and $10.7 million in capitalized website development costs due to continued investment in our product offerings, offset in part by $21.2 million in sales of short-term investments.

Previous wording

Net cash used in financing activities of $191.5 million during the three months ended March 31, 2025, was due primarily to $182.8 million in repurchases of our Class A common stock under the 2025 Share Repurchase Program and $9.0 million in payment of withholding taxes on net share settlements of restricted stock units.

Current wording

Net cash used in financing activities of $200.5 million during the six months ended June 30, 2025, was due primarily to $184.6 million in repurchases of our Class A common stock under the Original 2025 Share Repurchase Program and $15.3 million in payment of withholding taxes on net share settlements of restricted stock units.