CarGurus posted a sixth straight quarter of annual revenue decline this week as its core marketplace continues to be weighed down by a convalescing wholesale arm.

CarGurus posted $215.8 in revenue for Q1 2024, down 7% year-on-year (y-o-y) and down 3% from the previous quarter.

Net income of $21.3 million was up 80% y-o-y.

CarGurus’s marketplace showed continued strength with revenue of $187 million up 12% y-o-y. The company achieved this by boosting revenue per dealer while maintaining a stable customer count.

But the company’s CarOffer subsidiary, fully owned by CarGurus since December of last year, continues to post weak financials as its new owners retool the product and rebuild its engineering, product-development and sales teams under new line management. 

CarOffer’s dealer-to-dealer wholesale service posted revenue of $16 million, down 36% y-o-y and down from peak sales of $347 million in Q2 of 2022.

CarOffer’s consumer-to-dealer business (once called Instant Max Cash Offer, but now Sell My Car/Top Dealer Offer) was down even further, 69% y-o-y, to $12.5 million. 

In a quarterly earnings call, CarGurus CEO Jason Trevisan said CarOffer was being retooled with a view to mining its market data for use by dealers on its marketplace. “Overall, we are proud of the progress and improvement the CarOffer team continues to make, as we believe these steps are crucial to return the business to profitable growth in the next few quarters,” Trevisan said.

CarGurus, the no. 1 autos marketplace in the U.S. by traffic, reported a stable paying-dealer count. U.S. dealers numbered 24,419, virtually unchanged from the previous quarter, while dealers in the U.K. and Canada numbered, 6,756, down 2%.

Average revenue per subscribing dealer (QARSD) in the U.S. was $6,702, up 13% y-o-y, and in the U.K. and Canada, it was $1,882, up 21%.

Trevisan said CarGurus’s traffic dominance was key to its marketplace  strength in Q1.

“The quantity and quality of our leads remain pivotal factors,” he said in the earnings call. “In the first quarter, we delivered double-digit growth in leads driven by an increase in unique visitors and sessions. In the first quarter, we had 25% more unique visitors and 57% more minutes per visit than our next closest marketplace competitor, underscoring our audience leadership.”

U.S. average monthly unique users came to 34 million in Q1, up 6% y-o-y, while those the average in the U.K. and Canada was 8.6 million, up 19%.

For the current quarter, CarGurus predicted total revenue $202 million to $222 million, representing a  y-o-y decline of about 9%.

It predicted marketplace revenue of $189 million to $194 million, with the midpoint representing a 12% y-o-y gain.

See the Q1 2024 earnings announcement here.

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