Vehicle listings company CarGurus Inc. posted higher revenue in the third quarter, reflecting increased transactional capabilities and digital tools for dealerships, while net income slipped.
The Cambridge, Mass.-based company on Tuesday said the CarOffer wholesale trading platform continues to expand, along with a new online instant cash offer feature that debuted this year. At the same time, CarGurus' core listings business showed resilience despite ongoing headwinds from the microchip and inventory shortages, CEO Jason Trevisan told analysts on the company's quarterly earnings call.
Revenue from CarGurus' U.S. marketplace subscriptions and wholesale business both increased in the third quarter that ended Sept. 30.
CarGurus acquired a 51 percent stake in CarOffer in January. The platform allowed CarGurus to expand into wholesale capabilities for dealership customers, allowing dealers to create standing buy orders and providing instant offers to selling dealers.
CarGurus reported roughly 7,000 dealerships are enrolled on CarOffer's platform as of the third quarter, up from about 5,500 as of the second quarter.
The company's new Instant Max Cash Offer feature, which allows consumers to sell vehicles fully online, is now in 22 states and Washington, D.C., as of this week, CarGurus said Tuesday. It launched in three states in July.
"Performance this quarter was driven by three key factors: our ongoing evolution from a listings business to an end-to-end transaction-enabled marketplace, our partnership with dealers to develop innovative digitally initiated solutions, and finally, our ability to provide consumers a self-selective digital retail journey when buying or selling a vehicle," Trevisan said in a statement.
CarGurus reported 30,754 paying dealership customers as of Sept. 30, up from 30,162 on Sept. 30, 2020. U.S. paying dealership customers totaled 23,979 as of Sept. 30, up from 23,659 as of Sept. 30, 2020.
Q3 revenue: $222.9 million, up 51% from a year earlier.
Q3 consolidated net income: $29.3 million, down 10% from a year earlier.
Q3 consolidated adjusted EBITDA: $65.9 million, up 16% from a year earlier.
Guidance: Fourth-quarter revenue, $273 million to $285 million; full-year revenue, $885 million to $897 million.