The B2B marketplace business for CarGurus Inc. is running on empty.
For the second quarter ended June 30, CarGurus posted total revenue of $218.7 million. That’s a 9% drop from revenue of $239.7 million within the Q2 2023. Net loss was $93.58 million. That compares with net income of $17.73 million within the prior yr.
CarGurus is a digital auto platform for shopping, buying, and selling latest and used vehicles. The main drop in revenue got here from CarGurus’ once red hot wholesale marketplace platform for dealers.
CarGurus B2B marketplace
Within the second quarter, wholesale marketplace revenue declined yr over yr by 59%. That’s all the way down to $13.1 million from $32 million in Q2 2023. For the primary six months of the yr, wholesale marketplace revenue for CarGurus declined to $26.9 million. That’s down 49% from $46.5 million.
The decrease in wholesale revenue was “driven by a decline in dealer-to-dealer transaction volume as we proceed to deal with rebuilding our industrial pipeline and reinvesting in our product in a disciplined manner, with the last word aim of returning to profitable growth,” chief financial officer Elisa Palazzo told analysts on a recent earnings call.
CarGurus’ purchased CarOffer outright in December. The corporate was CarGurus’ wholesale platform for dealers. CarGurus acquired a 51% stake in CarOffer in 2021. CarGurus bought a controlling stake in CarOffer three years ago when demand — and pricing — for used vehicles was much higher due to pandemic.
However the market has since cooled considerably, CarGuru CEO Jason Trevisan told analysts.
“Our product is healthier today at CarOffer than it was two years ago,” Trevisan said. “But two years ago, it was processing significant volume largely because wholesale prices are rising a lot. We’ve made various enhancements to the platform, and it’s to present buyers and sellers confidence that they’ll conduct an important transaction, it’ll be a broad experience, and they’re going to. For buyers, they’ll find yourself with a automotive that they’ll become profitable with. To do this in a price-declining or highly price-volatile environment, you wish more insights and more safeguards.”
CarGurus, formed in 2006, is a Cambridge, Massachusetts-based automotive research and shopping website that assists users in comparing local listings for used and latest cars, and contacting sellers.
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