Marvin Fong

Marvin Fong asked about ASP and product mix, specifically the strength of higher-value items like fine jewelry, handbags, and watches. He inquired about supply pipeline visibility for these items, potential difficulties in obtaining them, and whether like-for-like ASPs are climbing within categories like apparel. He also asked for a breakdown of direct channel margin drivers, including the impact of Get Paid Now, and its sustainability.

Answer

CFO Ajay Gopal noted Q4's 22% growth was evenly split between volume and price, largely driven by a shift to higher-value items, with fine jewelry being a strong growth category in 2025. He explained their pricing algorithm uses over 100 data points to optimize prices and that the platform quickly adapts to shifting consumer preferences. Gopal expressed satisfaction with direct channel margin expansion (26% in Q4, 22% for full year), attributing it to a conscious mix shift towards Get Paid Now and other incremental supply, expecting margins to remain in the 15%-25% range.

Marvin Fong asked about ASP and product mix, specifically the strength in higher-value items like fine jewelry, handbags, and watches. He questioned the supply pipeline visibility for these items, if it's becoming harder to obtain them, and if like-for-like ASPs are climbing within categories like apparel. He also asked about the drivers of strong direct channel margins, specifically if it was product mix or Get Paid Now contribution, and its sustainability.

Answer

CFO Ajay Gopal noted Q4 growth was evenly split between volume and price, driven by a shift to higher-value items, with fine jewelry being a strong category in 2025. He explained that the pricing algorithm uses over 100 data points and the platform quickly adapts to consumer preference shifts. For direct channel margins, Gopal stated the improvement was due to a conscious effort to change the product mix, including Get Paid Now and other incremental supply, expecting margins to remain in the 15%-25% range.

Marvin Fong from BTIG questioned if the strong Average Order Value (AOV) was linked to potential tariffs and whether improved pricing would fuel more marketing investment. He also sought clarification on whether the expansion of the Athena platform involved rolling it out to new product categories.

Answer

President and CEO Rati Sahi Levesque attributed the AOV growth (up 8%) to both price and volume, driven by internal initiatives, but noted The RealReal is a 'tariff beneficiary.' She confirmed that efficiency gains in marketing would be reinvested. Both she and CFO Ajay Gopal confirmed that Athena's expansion to 30-40% coverage involves training its AI model and rolling it out to more categories beyond ready-to-wear.

Marvin Fong of BTIG questioned the components driving the increase in Average Order Value (AOV) and sought more detail on the margin differences between the three channels within the direct business.

Answer

CEO Rati Levesque attributed the 5% AOV growth to strong sales in higher-value categories like fine jewelry and handbags. CFO Ajay Gopal explained that the 'Get Paid Now' program is inherently more profitable due to a lower payout rate for sellers (e.g., 55% vs. 70% for consignment), though out-of-policy returns remain the largest component of the direct business.

Marvin Fong asked about the long-term incremental margin profile beyond 2024 and inquired about the reasons for the lower return rate in Q3, its sustainability, and the performance of the new return insurance initiative.

Answer

CFO Ajay Gopal explained that the long-term margin path is clear, with strong flow-through expected from growth due to high consignment gross margins and improving unit economics. CEO Rati Levesque attributed the lower return rate primarily to a favorable product mix and secondarily to operational efficiencies. She noted the return insurance initiative is in its early testing phase.

Marvin Fong sought a deeper understanding of Cars.com's strategy to prioritize marketplace integration, asking if ancillary products like AccuTrade, DealerClub, and Website Solutions would remain standalone or be integrated into a unified subscription. He also asked for clarification on the full-year guidance algorithm, specifically if dealer revenue would be up 2-3 points and advertising would detract about 1 point, and the envisioned trajectory for OEM revenue.

Answer

CEO Toby Hartmann explained that deeper marketplace integration means a unified, seamless experience for dealers, where products like AccuTrade could become part of a listing service or membership, offering greater convenience and value through bundling. He confirmed that while standalone options would still be available, the focus is on prioritizing bundling and integration. CFO Sonia Jain clarified that OEM and national revenue is expected to be flat to down on a full-year basis, with Q1 showing a similar trajectory to Q4.

Marvin Fong asked for a deeper understanding of the marketplace prioritization and integration, specifically whether ancillary products like AccuTrade, DealerClub, and Website Solutions will remain standalone or be integrated into a unified subscription. He also asked for clarification on the full-year guidance algorithm, particularly the trajectory of OEM revenue.

Answer

CEO Toby Hartmann clarified that deeper marketplace integration means a unified, seamless dealer experience, prioritizing bundling products into subscription services (e.g., Premium Plus) for enhanced value and convenience, while still offering standalone options. CFO Sonia Jain stated that OEM revenue is expected to be flat to down on a full-year basis, with Q1 showing a similar trajectory to Q4's performance.

Marvin Fong of BTIG asked for details on the go-to-market changes driving increased sales velocity, sought confirmation of dealer count growth through Q4 despite seasonality, and inquired about behavioral differences among OEM nameplates due to tariff exposure.

Answer

CEO Alex Vetter attributed the improved sales velocity to new leadership, better data and targeting, and faster cross-selling of the full solutions suite. He confirmed expectations for continued dealer growth in H2, as the dealer focus on technology transcends seasonality. Regarding OEM behavior, he noted that while dealers are broadly shifting to used cars, certain OEMs like Hyundai and Nissan have been more aggressive with advertising, and conversations are progressing on measuring Tier 3 sales outcomes.

Marvin Fong questioned the conversion timeline for the 2,500 DealerClub prospects and the company's monetization strategy for the platform. He also asked for clarity on the OEM and National business, specifically how much of the upfront ad commitments are at risk of being shifted versus cancelled.

Answer

CEO Alex Vetter highlighted rapid DealerClub onboarding and transaction growth, stating the immediate focus is on integration and value creation, such as the one-click link with AccuTrade, before aggressive monetization. Regarding OEM spend, both Vetter and CFO Sonia Jain characterized the situation as a timing issue driven by macro uncertainty, with clients shifting to month-to-month flexibility rather than cancelling plans. They expressed confidence in full-year growth but noted visibility on timing is limited.

Marvin Fong asked about the dynamics behind the quarterly decrease in website solution customers and how macro uncertainty, such as potential tariffs, was factored into the full-year guidance. He also sought clarity on dealer count growth expectations for DealerClub in 2025.

Answer

CEO Alex Vetter explained the website business was relatively flat and sees future growth driven by OEM security requirements and the integration of platform solutions like the Inventory Intelligence Platform. CFO Sonia Jain noted the guidance assumes a stable macro environment but that the company is confident in its back-half initiatives. Regarding DealerClub, Alex Vetter tempered near-term expectations but highlighted the founder's successful track record and the platform's asset-light, disruptive potential.

Marvin Fong inquired about the expected growth cadence for AccuTrade dealers and sought more detail on discussions with OEMs for further endorsements, including what OEMs are looking for.

Answer

CEO Alex Vetter expressed confidence in the health of the AccuTrade installed base, noting that the Q3 growth pace is a realistic target due to strong industry attention. He highlighted that OEM endorsements are a significant sales catalyst, with nearly 60% of Q3 AccuTrade sales coming from dealers of endorsed OEMs. He confirmed active discussions are underway with more OEMs for potential partnerships in 2025.

Marvin Fong asked for a breakdown of the 3 million-plus credit cards issued in Q4 across Brazil, Mexico, and Argentina, specifically comparing the growth to Q2. He also inquired if improving credit card NPL performance could lead to lower upfront provisions, making the product more margin attractive earlier.

Answer

CFO Martín de los Santos detailed that 3 million cards were issued in Q4, up from 1.5 million in Q2 and 2 million in Q3. Brazil drove the Q2-Q3 increase due to model improvements, while Q3-Q4 saw acceleration from Argentina's ramp-up (hundreds of thousands issued) and Mexico's better-than-expected payback periods. President of Commerce Ariel Szarfsztejn added that older cohorts in Brazil (2+ years) are already profitable at a NIMA level, providing encouragement for expansion, though the average portfolio is not yet profitable due to rapid user base growth.

Marvin Fong asked two questions about credit cards: first, for a breakdown of the drivers behind the substantial increase in credit card issuance to 3 million in Q4 (from 1.5 million in Q2) across Brazil, Mexico, and Argentina; second, if improving NPL performance could lead to lower upfront provisions, making the product more margin attractive earlier.

Answer

Martín de los Santos, CFO, clarified that 3 million cards were issued in Q4 (vs. 1.5 million in Q2 and 2 million in Q3). The Q2-Q3 increase was mainly Brazil (model improvements), while Q3-Q4 drivers were Argentina (ramping up issuance, 100k+ cards) and Mexico (better payback periods enabling faster issuance). Ariel Szarfsztejn, President of Commerce, added that Brazil's older credit card cohorts (2+ years) are already profitable at a NIMAL level, encouraging expansion. While the average is not yet profitable due to new users, it is expected to be profitable at maturity, with positive trends also seen in Mexico.

Marvin Fong asked about the potential impact of Mercado Libre's B2B initiative and Casas Bahia partnership on future GMV growth, and the dynamics driving the growth in average credit card loan size, specifically regarding underwriting discipline and credit quality.

Answer

Incoming CEO Ariel Szarfsztejn described Casas Bahia as an exciting partnership to fill selection/price gaps in heavy/bulky items, complementing 1P and 3P strategies, while B2B is a multi-billion dollar long-term opportunity in early stages. President of FinTech Osvaldo Gimenez stated they maintain underwriting discipline, adjusting issuance based on NPLs. He noted improvements in credit models and technology, allowing more frequent upsells to customers with good repayment history, confirming comfort with accelerating card issuance while maintaining discipline.

Marvin Fong inquired about the potential impact and opportunity for future GMV growth from MercadoLibre's B2B initiative and partnership with Casas Bahia. He also asked about the growing average credit card loan size, how credit is extended, and the maintenance of underwriting and credit quality.

Answer

MercadoLibre Incoming CEO Ariel Szarfsztejn described the Casas Bahia partnership as an exciting opportunity to enhance selection and competitive prices in under-indexed categories like heavy and bulky items, complementing 1P and 3P strategies. He noted B2B as a multi-billion dollar long-term opportunity in early stages. President of FinTech Osvaldo Gimenez affirmed maintaining underwriting discipline, explaining that new credit models and improved technology allow for more frequent upsells and line increases based on repayment behavior, enabling accelerated card issuance while controlling NPLs.

Marvin Fong from BTIG inquired about early customer purchase behavior under the new lower free shipping threshold in Brazil and asked about the company's comfort level with its pace of credit card issuance.

Answer

Commerce President Ariel Szarfsztejn described the shipping change as a long-term strategic play, not a short-term marketing investment, noting it's too early for detailed behavioral data. On credit, Fintech President Osvaldo Giménez and CFO Martín de los Santos expressed comfort with the current pace, citing a low 2% market share, improved models, and a willingness to slow down if negative signals appear, as they have done in the past.

Marvin Fong requested elaboration on the softness observed in a high average selling price (ASP) category in Mexico and asked for a normalized view on the Net Interest Margin (NIM) trend, excluding seasonal factors.

Answer

Ariel Szarfsztejn, EVP of Commerce, identified the technology vertical as the source of softness in Mexico due to aggressive competition, but noted that initiatives are in place to address this and that other categories grew strongly. Osvaldo Giménez, EVP of Fintech, explained that the NIM compression is a structural trend driven by a mix shift towards lower-NIM credit cards and a move upmarket to lower-risk customers, which is partially offset by growth in the higher-margin Argentina portfolio.

Marvin Fong asked if the lower APRs had the desired impact on unit growth and Carvana's long-term goal for offering the lowest APRs to prime customers. He also inquired if advertising expense per unit has peaked, given the investment in word-of-mouth advertising.

Answer

CEO Ernie Garcia confirmed that lower APRs generally had the expected impact on unit growth. He stated that the long-term goal (to 2030-2035) is to maximize fundamental gains and pass that value back to customers, making the path to 13.5% Adjusted EBITDA margin straightforward. On advertising, he reiterated that AdEx is a good investment given high contribution margins and the desire to lean into growth, which also fuels word-of-mouth, with no major changes in strategy.

Marvin Fong inquired about the sequential and year-over-year trends in Carvana's operating expense per unit, seeking clarification on the best way to measure this metric and future opportunities to reduce operations costs. He also asked about the dynamics underpinning the Q4 retail GPU guidance, specifically how recon and logistics efficiencies are being offset by macro factors and depreciation rates.

Answer

Mark Jenkins, Chief Financial Officer, broke down operating expenses into operations, overhead, and advertising. He noted advertising investment for growth, strong year-over-year leverage in overhead despite some transitory expenses, and a downward trend in operations expense per unit despite sequential bumps. Regarding retail GPU, he highlighted typical Q4 seasonality with higher depreciation rates and lower demand, attributing Q3's softer depreciation to an offset from Q2's strength, which was influenced by auto tariff announcements.

Marvin Fong asked about the sequential increase in operating expense per unit, future opportunities to reduce operations cost per unit, and the dynamics underpinning the retail GPU guidance for Q4, particularly regarding recon/logistics efficiencies versus macro depreciation rates.

Answer

Mark Jenkins, Chief Financial Officer, explained that advertising expense is increasing due to investment in brand building. Overhead expenses showed strong year-over-year leverage, with some sequential lumpiness from transitory items. Operations expense, while up sequentially due to one-time items, is on a downward trend with expected future fundamental gains. For retail GPU, Q4 seasonality typically involves higher depreciation rates and lower demand, with Q2 2025 seeing strong depreciation and Q3 2025 experiencing softer depreciation.

Marvin Fong from BTIG inquired about the lower loan sell-through rate and its potential connection to tariff-driven cash buyers. He also asked about the potential for further benefits from an improved cost of funds over the next 1-2 years.

Answer

CFO Mark Jenkins clarified that the sell-through rate comment was a comparison to a positive anomaly in Q2 2024, and the current quarter was normal. He attributed improved cost of funds to an expanding buyer pool and strong asset performance, implying continued opportunity for gains without providing a specific forecast.

Marvin Fong from BTIG asked if the quarter's lower loan sell-through rate was related to more cash buyers and questioned how much more benefit could be gained from a lower cost of funds over the next one to two years.

Answer

CFO Mark Jenkins clarified that the sell-through rate comment was a comparison to an unusually high rate in Q2 2024, and that the current quarter was normal. He noted that future cost of funds improvements would be driven by expanding the pool of loan buyers and the continued strong performance of the assets Carvana originates.

Marvin Fong asked about Carvana's ability to sustain its high rate of sourcing vehicles from consumers as it scales and inquired about the drivers behind its improving conversion rates.

Answer

CEO Ernie Garcia expressed confidence in the company's ability to scale its sourcing, noting that its economics have remained remarkably stable as it grew to its current size. He believes the integrated model of buying from customers, selling to customers, and leveraging the ADESA platform is fundamentally sound and scalable within the 40-million-unit annual used car market. He expects this stability to continue as the company grows further.

Marvin Fong of BTIG inquired why the retail average selling price (ASP) in Q4 came in higher than previously indicated and asked for guidance on how to model future leverage on operational expenses per unit.

Answer

CEO Ernie Garcia advised not to read too much into the ASP variance. Regarding operational expenses, he expressed pride in the current efficiency but affirmed there is still room for improvement across the entire operational chain, from logistics to customer care. While dollar improvements become harder as the base shrinks, he stated they have projects mapped out to continue driving efficiency.

Marvin Fong sought clarification on Fiverr's expectation to return to growth in 2027, specifically asking when high-value work might constitute a majority of the marketplace. He also inquired about structural changes to the enterprise offering and the development of AI-native distribution channels, including whether these would be specific partnerships or natural growth.

Answer

CEO Micha Kaufman explained that the GMV mix shift towards high-value work will lead to GMV inflection before it necessarily becomes the majority, with signals expected in coming quarters. For AI-native distribution, he indicated that expectations are based on existing proof-of-concepts with AI model companies and enterprises, aiming for product delivery at scale. He cited examples of partnerships for AI model safety and AI workflow automation.

Marvin Fong asked for clarification on the expectation of returning to growth in 2027, specifically whether high-value work is expected to constitute a majority of the marketplace GMV by then. He also inquired about structural changes to the enterprise offering and the nature of AI-native distribution channels.

Answer

Micha Kaufman (Founder and CEO, Fiverr) explained that high-value growth will lead to GMV inflection even before becoming a majority, and signals will be observed over coming quarters. He noted that the expectation for AI-native distribution channels is based on existing proof-of-concepts with AI model companies and enterprises, enabling them to build more ambitiously and requiring support for calibration, fine-tuning, and integrity.

Marvin Fong asked for more detail on the Q1 marketing opportunity, questioning if it was driven by factors like lower CPCs and if it continued into Q2. He also asked about the incentives for customers to engage in large, long-term Fiverr Pro contracts.

Answer

CEO Micha Kaufman explained that Fiverr's 'machine' constantly seeks and seizes marketing opportunities across different geos, channels, and categories, and that this opportunistic strategy will continue. CFO Ofer Katz detailed the Fiverr Pro incentives, clarifying it's not a subscription but a program for high-spending clients. Benefits include access to vetted 'Pro' sellers, exclusive features like hourly orders, a rewards program, and high-touch account management.

Marvin Fong asked for a breakdown of the drivers for the strong 2025 Services revenue growth outlook, particularly the contribution from ads versus subscriptions like Fiverr Go, and whether the Marketplace take rate would remain stable.

Answer

CEO Micha Kaufman confirmed that the guidance assumes a stable Marketplace take rate. He explained that the strong Services revenue growth is driven by a portfolio of products, including subscriptions like Seller Plus, AutoDS, and the new Fiverr Go, as well as advertising services like Promoted Gigs. The company did not provide a more detailed breakdown of the contributions.

Marvin Fong from BTIG, LLC asked for more detail on the upmarket strategy, wanting to know which new products like Dynamic Matching or Hourly Contracts are having the most impact. He also questioned the company's visibility into the typically strong Q4 seasonal ramp, given it was late October.

Answer

CEO Micha Kaufman noted that these upmarket products are extremely new but show high potential by catering to needs Fiverr previously didn't address, such as long-term, open-ended projects suited for hourly contracts. These products are attracting projects worth thousands of dollars. CFO Ofer Katz addressed the Q4 guidance, stating that despite seasonality and the U.S. election, the company has enough confidence to raise its full-year guidance based on Q3's strong exit rate, top-of-funnel stability, and the value-added services pipeline.

Marvin Fong asked how investors should measure the impact of AI on McGraw Hill's business, including internal metrics for development and costs. He also inquired about the company's spending priorities, balancing product development with field sales.

Answer

Simon Allen, Chair of the Board of Directors, emphasized measuring AI's impact through increased efficiency for educators, improved student comprehension, and enhanced human interaction. Philip Moyer, President and CEO, added that internal metrics include user engagement, learning outcomes, enterprise adoption, and acceleration into new markets. Bob Sallmann, EVP and CFO, stated that spending priorities remain focused on organic opportunities and adhering to the 8%-9% CapEx and product development as a percentage of revenue, while continuing to expand margins.

Marvin Fong asked how investors should measure the impact of AI on McGraw Hill's business, including internal metrics on development and costs. He also inquired about the company's spending priorities, balancing product development and field sales.

Answer

Chair of the Board of Directors, Simon Allen, emphasized a human-in-the-loop approach for AI tools, focusing on teacher relief and increasing efficiency, citing AI Reader and Writing Assistant. President and CEO, Philip Moyer, added that internal metrics include user engagement, learning outcomes, and enterprise adoption. EVP and CFO, Bob Sallmann, stated that spending priorities adhere to a laid-out roadmap, with product development and technology spend remaining 8-9% of revenue while expanding margins.

Marvin Fong inquired about the international segment, specifically trends in Spain and Canada, and the outlook for the back half of the current fiscal year and next year.

Answer

Simon Allen, Chairman, President, and CEO, explained that Spain's decline was due to a K-12 cycle similar to the U.S., expecting a change next year. In Canada, despite a significant reduction in overall enrollments, McGraw Hill's market share grew over 3.5% to 27-27.5% (up from 15% in 2019). He also noted upside in Latin America and the GCC market, expressing confidence in continued growth by focusing on markets with strong opportunities.

Marvin Fong asked about higher education enrollment data from a subject matter standpoint, specifically if any subject matter trends were particularly beneficial to McGraw Hill. He also inquired about international segment trends, particularly in Spain and Canada, and the outlook for the back half of the current fiscal year and next year.

Answer

Bob Sallmann, EVP and CFO, confirmed that disciplines with the highest growth rates, such as business, science, and other curriculum, are favorable to McGraw Hill, contributing to slightly higher enrollment figures than the headline undergraduate growth. Simon Allen, Chairman, President, and CEO, added that McGraw Hill's broad coverage across business, economics, sciences, math, humanities, and social sciences, combined with tools like AI Reader and Sharpen, allows for strong double-digit growth across all subject areas. For international, Simon Allen explained that Spain's K-12 business is experiencing a low year due to a similar cycle as the U.S., which will change next year. In Canada, despite an enrollment reduction, McGraw Hill has grown its market share by over 3.5% this year to 27-27.5%. He also noted upside in Latin America and the GCC market in the Middle East.

Marvin Fong inquired about details of the two new Lifted customers, including their contingent labor spend, employee count, and the evolution and timeline of the sales process. He also asked for more color on the Q1 2026 guidance, reconciling sequential client growth with sequential revenue decline.

Answer

Erica Gessert, Upwork's Chief Financial Officer, described the new Lifted clients as having tens of millions in contingent work spend and programmatic work, validating the product-market fit and differentiated solution. Hayden Brown, Upwork's President and Chief Executive Officer, explained that while new customer accounts are expected to grow sequentially in Q1 2026, their spend ramps over time, and enterprise revenue is expected to be down sequentially as investments are made for the Lifted platform's future launch.

Marvin Fong from BTIG asked for details on the two new Lifted customers, such as their contingent labor spend or employee count, and how the sales process evolved. He also sought further color on the Q1 2026 guidance, specifically why active clients are expected to increase sequentially while revenue is guided down sequentially, and the moving parts involved.

Answer

CEO Hayden Brown stated that the new Lifted clients are in the sweet spot of the ideal customer profile, spending tens of millions on contingent work, and were attracted by the differentiated compliant contracting solution. CFO Erica Gessert explained that enterprise revenue is expected to be down sequentially in Q1 due to investments for the Lifted platform, and while new customer accounts will resume sequential growth, their spend ramps over time, leading to a delayed impact on Q1 revenue.

Marvin Fong of BTIG asked if Upwork has quantified the GSV benefit from its 'Ooma' AI features and sought clarification on the cause of the slight top-of-funnel weakness mentioned, given the stated lack of impact from tariffs or public sector issues.

Answer

CEO Hayden Brown confirmed that the GSV impact from Ooma has been internally quantified, is factored into guidance, and contributes to their confidence in 2026 growth. CFO Erica Gessert clarified that the top-of-funnel softness was a general macro phenomenon observed during Q1, predating any recent government announcements.

Marvin Fong from BTIG requested a breakdown of the components driving the increase in GSV per client and asked about the assumptions for this metric that underpin the 2025 guidance.

Answer

CEO Hayden Brown clarified that the increase was not driven by hourly rates, which have been consistent, but noted that the high-growth AI category commands a 44% wage premium. For 2025, he stated that due to macro uncertainty, the company is assuming a relatively steady GSV per active client, while also accounting for normal seasonality where Q2 and Q3 are typically lower than Q1.

Marvin Fong from BTIG asked about the ideal client profile for the new Business Plus product and its role as a potential stepping stone to Enterprise. He also inquired about the potential market opportunity for the managed project service partnerships with companies like Ocoya.

Answer

CEO Hayden Brown explained that Business Plus targets a large pipeline of mid-market and large customers by providing a more accessible 'glide path' from the core marketplace. Regarding partnerships like Ocoya, she stated they are very early-stage proofs-of-concept for embedding Upwork talent into third-party ecosystems, and it is too soon to project the market size, though the model is exciting.

Marvin Fong of BTIG asked about CarGurus' future strategy for the dealer-to-dealer (D2D) wholesale market following the wind-down of the CarOffer transaction platform. He also inquired if the company would reconsider international expansion beyond Canada and the UK given its recent success.

Answer

President and COO Sam Zales explained that the go-forward sourcing strategy will focus on providing differentiated, data-driven technology and predictive analytics for inventory management and pricing, rather than facilitating transactions. CEO Jason Trevisan added that for now, the company's international focus will remain on Canada and the UK, as both are large markets with significant remaining enterprise value to capture.

Marvin Fong inquired if dealers were showing any hesitation in early 2025 due to macro volatility and asked for a progress update, framed as an 'inning,' on the CarOffer (Digital Wholesale) turnaround.

Answer

Jason Trevisan, CEO, noted that dealers are not very reactionary to potential future events like tariffs and are more focused on immediate operational factors like rising inventory days on market. Sam Zales, President and COO, characterized the CarOffer turnaround as being in the 'early innings,' highlighting a disciplined focus on managing OpEx, improving operational margins, and refining the product-market fit with new data insights before a full-scale relaunch.

Marvin Fong inquired about CarGurus' strategy for brand investment in the upcoming year and sought more detail on the decision to discontinue the CG Buy Online pilot.

Answer

CEO Jason Trevisan explained that the company is adopting a more sophisticated, multi-funnel marketing strategy to build brand awareness, supported by product enhancements and new channel exploration. CFO Elisa Palazzo added that the CG Buy Online pilot was discontinued following a disciplined capital allocation review to redeploy resources to initiatives with higher potential returns.

Marvin Fong asked for more details on the impact and roadmap for personalized communications and questioned what drove the growth in payments revenue, which outpaced the decline in GMS.

Answer

CEO Josh Silverman detailed that personalization gains came from more personalized titles and content in push notifications and emails, with a future focus on using LLMs for deeper, user-level personalization. CFO Lanny Baker explained that the payments revenue benefit was small as they are nearing the end of the seller adoption cycle for Etsy Payments, with only a few more countries left to implement.

Marvin Fong of BTIG, LLC asked if there were any notable performance differences across product categories and inquired about the company's appetite to use leverage for share buybacks beyond free cash flow generation.

Answer

CFO Rachel Glaser stated the new $1 billion buyback authorization provides flexibility to repurchase shares above current levels without needing to lever up, given the strong balance sheet. CEO Josh Silverman commented that category performance was broadly similar, but noted that pockets of 'real value,' like demi-fine jewelry, are outperforming.

Marvin Fong from BTIG sought clarification on the methodology for applying discounts to unregistered public securities like CoreWeave and ServiceTitan, and also asked for management's perspective on the recent news regarding OpenAI's nonprofit governance structure.

Answer

Chairman and CEO Mark Klein stated that the developments at OpenAI are not viewed as negatively impacting the company's value. CFO Allison Green explained that the valuation discount on public holdings is a direct result of the shares not being registered as of the reporting date and will be removed upon registration.

Marvin Fong of BTIG, LLC inquired about the company's capital structure, asking if the appetite for issuing 6.5% convertible notes was now satisfied after repurchasing a similar amount of 6% notes.

Answer

Chairman and CEO Mark David Klein confirmed that the company has kept its total debt level stable by issuing an amount of 6.5% convertible notes equivalent to the 6% notes it retired. Klein stated that the company is comfortable with its current leverage and does not anticipate issuing more convertible securities against the existing portfolio at this time.

Marvin Fong asked about the confidence level in the July timeline for the CDK and Tekion DMS integrations and the reasons for the delays. He also inquired about the current sentiment and behavior of dealers in the field amidst market uncertainty.

Answer

Jantoon Reigersman (executive) explained the delay with CDK was due to their resource allocation and architectural complexity, especially as they undergo a replatforming. He expressed confidence in the current roadmap and noted the Tekion integration should be faster. Regarding dealer sentiment, he stated that so far, the feedback is positive and there are no red flags, despite the overarching uncertainty.

Marvin Fong asked for clarity on whether the lost American Express OEM revenue would be fully recaptured within the year and inquired about the dealer pipeline and rollout strategy for the TC+ platform following industry events like NADA.

Answer

Executive Jantoon Reigersman stated that Q1 represents a temporary dip in OEM revenue and expects acceleration to resume in Q2. He confirmed a strong pipeline of dealers ready for TC+, with a phased rollout focusing first on California before expanding to other key states like Florida and Texas once current product enhancements are finalized.

Marvin Fong inquired about the detailed breakdown of the Q4 revenue guidance, specifically for TCMS, wholesale, and OEM segments, and requested an update on the TrueCar+ (TC+) pilot, its progress toward a national rollout, and its future monetization strategy.

Answer

Executive Jantoon Reigersman and CFO Oliver Foley clarified that the primary focus is on franchise dealer revenue growth. Foley noted that the wholesale business is an enabler for TC+ rather than a core growth driver, while TCMS is expected to be a significant contributor. Reigersman explained that while the TC+ pilot dealer is in California, it has already fulfilled used car orders across 13 states, proving its ability to expand a dealer's market. Near-term priorities for TC+ include integrating AI-powered fraud detection and further streamlining the dealer workflow. Monetization will eventually be part of a broader dealer subscription model.

Marvin Fong inquired about the specific tax policies, such as bonus depreciation, causing uncertainty in fractional sales. He also asked for an update on the current demand and pricing environment, and the expected timeline for acquiring the remaining Challenger jets in 2025.

Answer

CEO Thomas Segrave confirmed that uncertainty around 100% bonus depreciation is the primary factor delaying fractional sales decisions. He stated that demand remains very strong, exceeding current capacity, and that the company has successfully implemented price increases on its light and mid-sized jets. Segrave also clarified that the addition of new Challenger jets is expected to be a smooth process throughout the year, with financing structures in place for near-term acquisitions ahead of a new facility intended to support Q3 initiatives.

Marvin Fong requested clarification on the composition of the $200 million to $250 million cash burn guidance for 2025, noting that his initial calculation suggested a potential decrease in R&D spending. He asked for a more detailed breakdown of the operating expense components.

Answer

CFO Eduardo Couto corrected the premise, explaining that the $100 million CapEx figure is the total project cost, not the 2025 spend. He broke down the 2025 cash burn guidance: approximately $150-$160 million for R&D, around $30 million for CapEx, and $20-$30 million for SG&A. Couto emphasized that R&D for eVTOL development remains, by far, the largest expense category for the year.

Asked for an update on Q4 consumer behavior, the outlook for container shipping rate pressures into 2025, and clarification on the future fixed cost structure after all cost savings are realized.

Answer

Consumer activity in Q4 has been robust so far, and the company is confident in its guidance. Container shipping costs are expected to remain higher than 2023 levels through the first half of 2025. The fixed cost run rate is expected to decrease in 2025 due to the full-year impact of restructuring, lower auditor fees, and reduced insurance premiums.