Alejandro Palacio

Alejandro Palacio asked CarGurus to disaggregate the CarSid growth for the year, distinguishing between contributions from pricing and new product additions, and how this compares to the prior year. He also inquired about the company's capital allocation strategy for share repurchases, considering the higher level of expected investments.

Answer

CEO Jason Trevisan stated that unit pricing is one of the least strong levers for CarSid growth, with upleveling (upgrades) and add-on product adoption being the primary drivers. He noted that CarGurus adds more value to products to support these growth areas. Regarding capital allocation, he mentioned the new $250 million share repurchase program, explaining that CarGurus prioritizes investment in the business, M&A evaluation, and then returning capital to shareholders through repurchases.

Alejandro Palacio asked for a breakdown of QARSD growth for the year, distinguishing between pricing and new product additions, and how this compares to the prior year. He also sought insight into CarGurus' capital allocation strategy for share repurchases given the higher expected investment levels.

Answer

Jason Trevisan, Chief Executive Officer, explained that unit pricing is a less significant driver of QARSD growth, with upgrades and add-on product adoption being stronger levers, followed by price increases and lead quantity/quality. He noted that CarGurus adds value to products to drive these metrics. Regarding capital allocation, he clarified that while investments are increasing, EBITDA margins remain strong. He pointed to the newly authorized $250 million share repurchase program, outlining the company's capital allocation priorities: investment in the business, M&A evaluation, and returning capital to shareholders.