CarGurus marketplace biz grows; digital wholesale struggles

Vehicle listings company CarGurus Inc. reported a second-quarter net loss of $68.7 million because of $127.7 million in accounting charges involving goodwill and asset impairment.

That compares to $13.8 million in net income during the same period a year earlier.

CarGurus, of Cambridge, Mass., faced continued struggles with its digital wholesale business, but it saw a 14 percent gain in U.S. marketplace revenue, continuing a first-quarter trend. CEO Jason Trevisan said in a statement the company continues a rebuilding mode with digital wholesale, even as its marketplace business grows from new products and higher prices.

"Our marketplace business continued to accelerate, achieving the largest quarterly revenue increase since 2021, driven by higher adoption of add-on products, continued migration toward premium subscription tiers, and expansion in our global paying dealer base," Trevisan said. "In our digital wholesale business, we are focused on rebuilding our leadership team, optimizing our go-to-market execution and operational capabilities."

CarGurus' stock price was up nearly 4 percent to $26.22 in early trading Aug. 9..

Consolidated net loss: $68.7 million compared with $13.8 million in net income during the same period a year earlier because of $127.7 million goodwill and other asset impairment charges.

Revenue: $218.7 million, down 9 percent from the same period last year.

Digital wholesale: Revenue of $23.5 million, down 66 percent. This segment includes dealer-to-dealer and Instant Max Cash Offer services and products sold via the wholesale digital trading platform CarOffer. The division also booked a $138.2 million operating loss.

U.S. marketplace revenue: Up 14 percent to $180.1 million.

Paying dealers: 31,352 as of June 30, 1 percent higher than the previous year. That breaks down to 24,446 in the U.S. and 6,906 internationally.

Transactions: Down 58 percent to 8,778.

CarGurus also repurchased $61 million worth of shares in the second quarter.

The company updated its third-quarter guidance to revenue of $212 million to $232 million, including marketplace revenue of $199 million to $204 million.