All right, good morning. I'm Ralph Shackart, Internet Analyst at William Blair. I see a lot of familiar faces, so thank you so much for attending our Annual Growth Stock Conference. Today we're going to kick it off, at least from my rotation of Internet companies, with CarGurus. I have Jason Trevisan, the current CEO. We're just talking. We've been working together since 2017 when the company went public. We'll get into sort of the overview, but CarGurus is sort of at a high level. Its competitors are Cars.com and Autotrader and the like. Think of CarGurus as to Google in a traditional sense, where if you put in a search, the actual vehicle is presented versus some of the competitors that are more pay-for-inclusion, which you may or may not get the actual search results of the vehicle that you put in. More recently, the company has been doing a great job executing on a strategy where they're providing more products and services for the companies, their dealer customers, locking in longer-term relationships, and done a great job pushing up pricing along the way. We're going to do a fireside chat format. It's a little bit awkward. We're not set up for fireside right here, but I'm going to move into the chair, and I think my mic is on. Sound good? Perfect. Good. All right. Maybe just kind of kick it off, Jason. There's a lot of generals that come to our conference. Give a high-level overview, if you can, sort of the history of the company, maybe how you transitioned from CFO to CEO, where you are today, and then kind of a little bit of evolution in the business. Sure. Thanks very much for setting that up. As Ralph said, we are an online automotive marketplace. When we began, we were competing with the incumbents like Cars.com and Autotrader. What differentiated us was that we offered more transparency, more inventory, more selection than our competitors because our competitors, as Ralph said, had paid inclusion and paid placement models, and we had a freemium model. We invited all inventory from all dealers to come on our site, and we gave unbiased and transparent deal ratings on those cars. We gave more price history of the cars, more history on the cars, dealer ratings, market values of the cars. By providing that transparency, we were able to earn the trust of consumers and build the largest consumer audience. That began the flywheel of a two-sided marketplace that since then has allowed us to grow into the number one marketplace online. Today, on the consumer side, we have the most uniques, the most sessions, the most time spent, most engagement, highest NPS. I mean, we have won the consumer side. Then on the dealer side, we have the most paying dealers, the highest ROI, the highest satisfaction, et cetera. That creates the most liquidity on our marketplace. That is our core marketplace business. It is a subscription model. Dealers pay us a monthly subscription for various products, tiers of products, et cetera. Since then, and more recently, as Ralph mentioned, we have been expanding across both the consumer lifecycle as well as the dealer workflow. From a consumer lifecycle perspective, they go through several stages when you're buying a car. Many of you, I'm sure, have gone through this, but you do the initial research. You decide what type of car you'd like. You then search for the actual car you'd like. You connect with the dealer. You go through, and you ultimately make your purchase decision. Historically, when we started out, we were just right in a very specific point of once a consumer knew what they needed, we could help them find the best type of that car from the best dealer. Since then, we've expanded quite a bit to go upstream for consumers. We help them do more research to help them figure out which type of car they want. We also go further downstream. After they've connected with the dealer, we're helping them with things like getting fully qualified for a loan, putting down a deposit on the car, getting a trade-in value, setting up an appointment. We're helping them get much closer to the actual purchase. On the dealer side, we've helped across their workflow. Dealers need to do five key steps in running a—I'm oversimplifying—but five key steps to run a dealership. They need to source cars, price them, merchandise them, market them, and sell them. We began simply by helping them with marketing their cars. We've since leveraged our largest data platform in the industry to provide them with insights, predictive analytics, and tools that help them do all steps of that. We're helping them recommend to them which types of cars they should source to bring on their lot and actually helping them find those cars. We're helping them with predictive pricing and merchandising to tell them how they should think about changing certain prices of cars to sell them more quickly or at a higher margin. We're obviously helping them with marketing, and then we're helping them complete those leads to a closed sale with a consumer. Great. Maybe talk about how your model has progressed from—I do not know if friction is the right word to characterize it before—where they were sort of paying for listings, but how it has evolved to more of a partnership where you are providing more data sets, like you sort of alluded to, and how that sort of helped you in that evolution with your clients or customers. Sure. We used to simply sell leads in the most pejorative sense. As we've expanded across that workflow, as I mentioned, we've become much closer partners with our dealer customers. That takes many forms. We are literally just providing them with more options of products, more features to our products, more intelligence and insights, many of which are embedded in our core products, so they get those for free. There is just more value that we're delivering in that sense. We're engaging with them much more. We have a much more consultative relationship with them than we used to. I mean, going back many, many years, back in 2017, when Ralph mentioned, we would sign up a dealer, and we may not talk to them for several months. We may not even engage with them until the renewal at a year's time. That is entirely different now. We are working with our customers on a much more frequent basis. The third is we have teams that go into dealerships, and they will actually work with and train and educate and work on systems integrations with dealers to really sort of catapult the performance of that dealer so that they understand all of the ways that they can use our platform, all of the value they can get out of it. All of those things are, I think, manifesting in a mindset shift with our customers where they are thinking of us as longer-term customers. I think you mentioned contracts earlier. Now we are signing a good percentage of our new customers on long-term contracts, 6-month or 12-month contracts. Our industry has been one that has always been monthly. That is how we began. It was a monthly contract. Now, with this mindset shift and with this tighter partnership, we have both a relationship with them. We have dealers now coming to visit us weekly. In the contract terms as well, it signals it. The last few quarters, several quarters, you've had some acceleration in the core listings business. Maybe sort of double-click into the drivers there. I think last quarter, the highest dealer count growth in a while. Maybe kind of walk people through the way you price and what's been driving the reacceleration in the core listings business. Sure. There are two factors to the dealer side of our business as we think about growth and revenue. There is the number of dealers we have or the number of rooftops. Then there is a metric that we have called quarterly average revenue per subscribing dealer. It is a mouthful, QARSD. That is how much each dealer pays us on average. Historically, for the past few years post-COVID, we have not been growing rooftops as quickly. We have been much more focused. We have always been focused on monthly recurring revenue and the retention and growth and expansion of that revenue. We have been growing dealers modestly. Last quarter was our highest rooftop growth quarter in a long time. I think that is a function of there are no silver bullets. A lot of the really wonderful things we are doing with our product, we are also executing well on the go-to-market side. I think our product expansion is probably most to credit for that. We've also been growing our QARSD, though. That's been a much more powerful driver of growth for us. The key elements of what drives QARSD are when we sign up new dealers, we're signing them up at more market rates, whereas a lot of our install base is still on legacy pricing that we have to bring up slowly over time. We've done a really good job upselling our customers to higher packages. We've done that by packing in more features and more value into higher packages. We've been introducing new products, so we've been cross-selling products. We do do like-for-like pricing increases. We've historically been priced under the market. We've always had the strongest ROI, so we've leaned into that lightly to grow pricing. If we just grow leads or grow the quality of those leads, dealers sell more cars, and the ROI increases, and we're able to charge more for that. The relationship between QARSD and rooftops is a mathematical one. QARSD is our total revenue divided by the average number of rooftops. When we grow rooftops significantly, revenue typically takes a little while to catch up. That is a headwind to QARSD. We look at the overall revenue growth or MRR growth. Historically, I think you've talked about when you've raised prices and maybe some of the customers have walked away and they've come back. Maybe kind of share some of the metrics that you've provided there and what the trend's been in that situation. Sure. As I said, we have historically been priced under our competitors. If you look at just a cost per lead calculation that a dealer may do, that's oversimplified because it doesn't often take into account all of the other features that we may offer. I mean, we offer several what we call dealer data insight products. Those are bundled in with our listings, and we don't charge extra for those. If we keep adding more of those and they're not giving those credit, then a cost per lead is an oversimplified metric. That said, our cost per lead has historically been lower than our competitors. That's how we earned our seat at the table years ago. We have slowly brought it up. In every dealer survey that I've seen, we're always credited as the highest ROI platform for dealers to work with. We have slowly been bringing up, though, our cost per lead, average cost per lead. It remains typically below our competitors, and the ROI is the strongest. What was the second part of the question? Maybe just touch on, if you could give us a sense by asking just what percentage of your customers come back or rooftops come back over time. Right. As we have grown some of our pricing, it's typically an annual discussion that we'll have with dealers where if they're not taking on new products or they're not changing packages and sort of everything else stays the same, then we will revisit in a year and look at the value delivering them and what they're paying us and see if we think there needs to be an adjustment. In situations where a dealer is egregiously underpriced, they know it, we know it, we just haven't sort of tended to the account as well as we should have, we will go back and say, "If nothing else is going to change, there's going to be a significant price increase to get you to market rates today." Historically, we started this in earnest about two years ago once sort of COVID had passed. We had a process called annual business review, which was addressing our most underpriced dealers. The average increase that we would see would be well into the double digits with those. The vast majority of dealers said, "I get it. I understand." They stuck with us. The minority of dealers who did churn and say, "I can't handle this size of a price increase. I may have been getting a great deal before, but I'm not going to go to this," the majority of those came back within six months. Can you provide some perspective, even if you can't sort of give the specific number, about how much more headroom you have on the pricing lever or maybe a sense of the runway or growth if you want to tie it more broadly to the core listings business? Dealers spend about $12 bilion-$14 billion on digital advertising. They spend about $22 billion on total advertising. We are the largest audience of car shoppers in the country by a wide margin, the most engaged audience of car shoppers. We are garnering about 4% of their marketing spend. The dealers spend about $3.5 billion on marketplaces. We attract over half of consumer mind share in their shopping time spent. Yet we're only about 26% of dealers' spend on listings on marketplaces. From a top-down perspective, we have significant headroom in the listings segment alone, based among many other things on consumer time spent. I would even argue that within their digital spend and within their overall spend, you'll continue to see share shifts from offline to digital. That will continue to grow. Within digital, we believe marketplaces and most dealers will say marketplaces is one of the highest ROI categories that they have. That's sort of the top-down. From a bottoms-up perspective, the ROI that a dealer will generate on their spend with us can vary significantly. But it's not unreasonable that dealers will make three to eight times, three to eight dollars of gross profit for every dollar they spend on us. Maybe transitioning a little bit to the CarOffer business. Maybe you can provide some perspective what the motivation was to acquire the company and really working through a lot of the operational changes in the business, sort of where you are in that evolution, and then give some perspective without putting a point estimate on how to think about when that business returns back to growth. To level set for everyone in the room, CarOffer is a digital wholesale platform that we acquired a few years ago. If you go back to the workflow that I described among dealers, the first step is they have to source cars. Dealers source cars a number of ways. They can take trade-ins from consumers. They can just buy cars from consumers. You'll see a lot more dealers doing that. One of the biggest ways in which they get inventory, and this is used inventory specifically, is through the wholesale market. The wholesale market is an existing market where dealers are buying and selling cars with other dealers. CarOffer is a digital wholesale transaction platform. It's unique from the traditional auction model in so much as it's called an instant trade platform. Rather than me putting a car up for sale and several people bidding on that car, instead, dealers will say, "These are the types of cars I want. This is how much I'm willing to spend for those cars," and sort of put those virtual offers on inventory that's in the system. The seller can decide if they want to sell it. It actually operates more like a stock market than it does a traditional auction model. The reason that we got into wholesale is because of how absolutely linked and coupled all of the steps of a workflow are. The best way for a dealer to make money selling a car retail is to source the right type of car at the right price in the first place. We have the strongest, most robust retail signals in the industry. We can tell every dealer the search trends, the shopping trends on every car in their lot, on every type of car that they have. That data and those insights allow us to say, "And therefore, dealer X, these are the five cars that you should acquire. This is how much you should pay for them." We were already giving them those insights, and we want to give them a channel through which to go acquire them. As Ralph said, we are working through some challenges in the business. That instant trade model worked incredibly well during COVID when wholesale prices were rising. It was an astronomical growth story. Since then, as the wholesale market has become more volatile, we have realized that the instant trade model is less flexible than an auction model. We are working through still some product-market fit from a technology platform perspective. We're working through some, we're rethinking some of the ways in which we handle some of the operations in so much as there's inspections, title transfers, shipping cars. We do all that through partners. We're looking at how we may consider tweaking those models with partners and/or asking the actual buying and selling dealer to do more or less of the transaction because we want to get that business unit profitable, and we're not there yet. The question I get from investors often is, how strategic is CarOffer? It seems like it maybe has taken up a lot of management bandwidth. Just kind of curious, strategically, how important do you see that as part of the business going forward? Do you think that's a sort of a fair observation by investors? I can't say if it's a fair observation. I would say that sourcing cars is central to a dealer's success. In giving them the insights, we are, and this is playing out, this is happening with dealers. When we give them the insights, they are acting on those insights, and it's leading to profitable car sourcing and selling for them. We really would like to figure out how we're able to then allow them to press the button, so to speak, to actually complete that transaction. If we can't do that, then we'll look at the next best step, which is to give them the insights and tell them where they can go acquire that car. Right now, we still want to own that transaction. You brought up search. I'm guessing that search on your own platform. Maybe sort of broadening it out, there's been a lot of, obviously, disruption or changes with GenAI. Can you walk through sort of you traditionally have been a pretty high SEO business and maybe sort of any changes that you've observed within the search landscape and maybe broadly speaking, how your search traffic trends have been? Back in the day, we were very reliant on SEO. Since then, we've diversified our performance marketing channels quite a bit and just our audience acquisition channels quite a bit. We've also gone up funnel in building a brand. Those are the two dimensions, I would say, in broad brush strokes. Moving up funnel, creating brand, which creates direct traffic and more app traffic, more branded direct entry traffic. Diversifying performance channels has also resulted in much less spend of our spend on Google. We do optimize our traffic acquisition all the way down to the conversion to a sale at a dealer. That ensures that we are not just simply buying cheap traffic or sending low-quality leads to dealers. Some channels that are great for traffic acquisition, like some of the social channels, have proven to not be high-quality traffic. That is not fruitful to our customers, so it is not fruitful to us. By going up funnel and diversifying performance, a much, much smaller percent of our traffic today is from SEO, and a smaller% of our traffic today is from even SEM. Maybe kind of transitioning to just maybe broadly speaking, can you maybe talk about the health of dealerships, kind of what you're observing in the market between new and used cars? I know you talked about it on the last earnings call, but sort of touch on tariffs and how that may or may not impact the business going forward. Very recently, tariffs created a very strong pull-through where consumers were rushing to buy cars, both new and used, new especially for fear of rising prices. That abated in April, and numbers are pretty much back to where they were pre-pull-forward. On the used side, and I should mention, too, for those less familiar, our marketplace, if you look at all of the inventory, it's almost 50/50 new and used. If you look at the volume of leads that we're sending to dealers and where all of our insights are, that's 90%+ for used. The new market is almost a commoditized market. There's MSRP on new cars, and two new cars are exactly the same. Used cars, it's entirely different. That's where a lot of our analytics can give one dealer with an edge a huge advantage. Overall, used inventory is up a little bit year over year. Sales are up a little bit year over year. Mid-single digits, nothing earth-shattering. Used is also back to normal-ish. In these times of uncertainty, though, that's when dealers value most insights that are going to help them get an edge. We're giving them predictive pricing intelligence that tells them if they change the price of this car by something as little as $60, they're going to get 40% more leads per day on that car. We're telling them there's demand increasing for this type of car that you have on your lot. Inventory is low in your region. You should raise the price of this car by $700, and you're not going to see a degradation in your lead volume. In these times of uncertainty from tariffs, we are seeing more reliance on our insights. We're typically seeing a flight to quality. If they had historically been working with multiple marketplaces, they may consolidate that into one, and we're typically the beneficiary of that. Insights, flight to quality. I forgot the third. They are oh, when consumers are uncertain and consumer sentiment is low, dealers know that they need to market more aggressively. That also brings them to our platform. You mentioned consolidation with the analytics that your platform provides. How broad-based is that? Is this sort of an opportunity where you could really lean in and take more share and maybe sort of touch on that? Maybe speak to, maybe without speaking directly to a competitor, but just sort of the competition in general. Are they reinvesting their platform? Are you reinvesting in your platform and how that's playing out right now? We are taking share. We've been growing at low teens for the past couple of years in a category that's not growing that fast and with competitors that are not growing that fast. I think that's a function of all of the things that we've been talking about here. What drives that is ultimately dealers that are more reliant on these additional features and products that we're building. The way that we're building them is by investing more in innovation. We have a higher percentage of our products and engineering team today focused on net new products and innovation. It's a larger team to begin with. AI is accelerating the productivity and efficiency of those teams. We are introducing new products and innovating more quickly than we ever have. That is a flywheel. I mean, so we have reached our long-term margin targets in our marketplace business. We focus quite a bit on margin, but we're also focused on continuing to grow, continuing to grow our lead, and continuing to build new products. Great. Looks like we have about four minutes left. I'll sort of pause and see if there's any questions in the audience. It's always the awkward time this time. All right. I always like to ask this for my companies. Anything that we didn't cover today or anything that you'd like to sort of reemphasize for investors as they're thinking about CarGurus as they leave today and are meeting a bunch of companies and how you want to sort of leave today, the impression with investors? Sure. We've talked a lot about how we've grown into the market leader in the U.S. in almost every dimension and continuing to take share. We have an international business as well. We operate a marketplace in Canada and a marketplace in the U.K. Those two countries combined as a business unit, so to speak, are growing much faster than our core business. They're both the number two in those markets. The number ones in those markets are legacy incumbent, very high-margin businesses that dealers are looking for alternatives for. In both countries, we do a lot of dealer survey work. Other people do as well. In both countries, we are listed by the vast majority of dealers as the top ROI provider for them. We are the number one auto app download in Canada, as an example. In both the consumer and the dealer ecosystems in those markets, we are growing very quickly, taking a ton of share and emerging into the clear number two. That is, in Canada's case, for instance, almost at lead parity with the leader. Those are businesses that are valued at many, many billions of dollars. We are vying to be the future number one. Great. We do have a question here. What's the term of the contract with the dealer here in terms of length? Historically, it's been a monthly contract that just auto renews. With a lot of the work that we've done to introduce new products and features and continue to grow our lead volume, dealers are seeing the value and locking into a longer term. I think it was last quarter, maybe two quarters ago, we said 40% of our new contracts are long-term in nature. Long-term for us is 6 months or 12 months. Just a question on the new versus used. Are there things on the new side that you do to drive sort of more penetration on the new side for the dealerships? Things that we can do for the consumer new car experience that will embed us further into the dealerships. Things to do to penetrate deeper to dealers on the new side to drive sort of dollars on the new side. Yeah. We are doing some of that. We are improving our new car experience, which honestly, we've not focused as much on in the past. We are helping the dealers with a lot of insights that benefit new car as well. We are showing them new car retail demand trends in addition to used car. A lot of consumers are willing to switch over between new and used when they're shopping. They oftentimes don't realize that they are. We're showing more in financing options on our site that show consumers, "Hey, I know you were looking for a used car, but actually, with these rebates and incentives running right now, you can get into a new car for less money per month." We're helping consumers go on both sides of that line, which in a dealer's mind, I wouldn't say they're indifferent to it because the economics are very different. For franchise dealers, they just want to get a consumer in and give them as much choice as possible. We're helping them expand that choice beyond just a single category of used or new. Fortunately, looks like we're out of time. Thank you for your interest in CarGurus and Jason Trevisan.