Vehicle listings company CarGurus saw its revenue rise in the first quarter and attributed gains to success in its core listings and digital retail businesses, its acquisition of CarOffer and recovery from the COVID-19 pandemic.
CarGurus said Thursday that net income surged 76 percent to $22.3 million in the first quarter.
The company, of Cambridge, Mass., reported revenue of $171.4 million in the quarter, up 9 percent from the year-earlier period. Revenue from dealership subscriptions on its vehicle marketplace dropped 2 percent to $139.6 million.
"It's been a year since the pandemic initially impacted our industry, and in this past quarter we've grown beyond where we were before COVID lockdowns," CEO Jason Trevisan said on an earnings call Thursday. "Not only have we returned to year-over-year growth, but we also believe we have a structurally more profitable business despite the larger investments we're making in our digital retail and wholesale growth pillars, which we expect to drive long-term growth."
Shares of CarGurus were up 9.6 percent to $26.40 in Friday morning trading.
GarGurus reported having 31,213 total paying dealership customers as of March 31, down 6.2 percent from 33,260 in the year-earlier period but up slightly from 30,631 at the end of the fourth quarter of 2020. The company describes a paying dealer as one "with an active, paid marketplace subscription at the end of a defined period."
The company said CarOffer — the wholesale trading platform it completed a 51 percent acquisition of in January — grew in the last year while consuming very little capital.
Trevisan said 2021 has seen "increasing velocity on CarOffer dealer acquisition and transactions and a growing backlog of dealers to onboard."
CarGurus said Thursday it is witnessing inventory and pricing volatility from the global semiconductor chip shortage that is snarling parts of the automotive industry -- including its own segment.
While consumer demand was strong in the first quarter, CarGurus said it anticipates dealers will continue to face heightened demand and inventory challenges for several more months. Trevisan said the company expects those to normalize by the end of the year.
CarGurus had 827 full-time employees as of Dec. 31, according to its most recent annual report, filed in February. That's down from 921 at the end of December 2019.
The company in December 2020 and February 2021 waived marketplace subscription fees for paying dealers in the U.K. because of more national lockdowns, similar to cost-cutting measures it imposed in the second quarter of 2020. More billings relief may be needed as the COVID-19 pandemic continues, the company said in the annual report.
