Further, during the course of our call today, we will refer to certain non GAAP financial measures. A reconciliation of GAAP to comparable non GAAP measures is included in our press release issued today as well as in our updated Investor presentation which can be found on the Investor Relations section of our website. We believe that these non GAAP financial measures and other business metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency as it relates to metrics used by our management in its financial and operational decision making. With that, I'll now turn the call over to Jason.

Thank you, CarGurus. Thank you all for joining us today.

In 2024, our North Star was Intelligent Acceleration, reigniting growth and expanding margins. We delivered consistent double digit year over year marketplace revenue growth accelerated new product introductions and had stronger operating leverage. In 2025, we're building on that momentum what we are calling the year of transformative innovation, innovation that's customer centric differentiated, heavily leveraging AI, and opens up new avenues of product and platform growth for us with both consumers and dealers. While innovation is not new to CarGurus, having pioneered a freemium model instant market value, deal ratings, digital deal, and dealer data insights to name just a few. We are innovating in even more profound ways today than we ever have. Our organization is better structured to solve customer needs.

We're dedicating a higher percentage of resources to net new products. And investing in AI to accelerate innovation. Our strategy for 2025 centers on three value creation drivers. One, expanding our suite of data driven solutions across dealers' workflows to help them drive more profitable businesses. Two, meeting the evolving needs of car shoppers by powering a more intelligent and seamless journey And three, enabling dealers and consumers to complete more of the transaction online streamlining the final steps of the deal. These drivers have fueled meaningful progress in how we operate and the results we deliver. Now, turning to our first quarter performance. Marketplace revenue grew 13% year over year, adding $25,000,000 driven by dealer count growth, subscription tier upgrades, increased adoption of value added products and services, and strong lead growth. Marketplace adjusted EBITDA grew 27% year over year, with margins improving more than three forty basis points to nearly 33%. International revenue expanded 20% year over year. Driven by steady traffic growth approximately 22% year over year aggregate lead growth in Canada and The UK, and continued product innovation. In Canada, these factors supported accelerated dealer adoption, In a recent survey of a select group of CarGurus dealers, 90% reported seeing better ROI on CarGurus compared to alternative platforms.

Consumer engagement also remained strong. CarGurus was Canada's most downloaded auto app in Q1. Contributing to an 85% year over year increase in direct traffic and reinforcing the strength brand. In The UK, a recent survey of a select group of CarGurus dealers ranked CarGurus number one in ROI compared to alternative platforms. A key input as we scale and grow market share. Double digit year over year lead growth was underpinned by an eighty two year over year increase in direct traffic. While lead quality also improved with stronger buyer signals. OEM advertising sustained healthy revenue growth in Q1, delivering double digit gains year over year. This performance was driven by strong annual upfront commitments which also grew at double digit rates year over year. And set a solid foundation for momentum. Our continued impressive results demonstrate our leadership in the market marketplace business and highlight the traction we're gaining across new areas of innovation, which we believe positions us to build on this momentum throughout the year. I will now outline our progress against each strategic driver. Driver number one, expanding our suite of data driven solutions across dealers workflows help them drive more profitable businesses. In Q1, we advanced our existing tools to give dealers greater inventory control and predictive intelligence.

Empowering them to make more informed decisions. Backed by the industry's largest retail data and consumer insights moat, we are also delivering actionable recommendations that improve performance across the dealer work workflow. We introduced VIN level targeting to give dealers more granular control over how they price, manage and promote inventory. This capability first launched with Highlight, enabling dealers to apply customizable strategies to feature their most compelling listings to more in market shoppers. Highlight adoption grew 32% year over year, and average leads per day increased 115% year over year following the introduction of VIN level targeting alongside further product optimizations. We're now extending this capability to our real time performance marketing solution. Allowing dealers to promote specific vehicles such as new arrivals, aged units, or high value listings directly from their dashboards. Collectively, these enhancements enable dealers to respond rapidly to market changes, and move inventory with greater speed and precision. Adoption across the Dealer Data Insights suite accelerated. Next Best Deal Rating, our first product, is now used by over 17,000 dealers globally, with 74% taking action on our pricing recommendations in Q1. Merchandising Health optimized approximately 34,500 inventory units nearly 6,400 dealers. And Maximize margin usage rose 64% quarter over quarter, Dealers using it increased average listing prices by $747 with nearly half of those vehicles still turning within two weeks.

Internationally, after introducing introducing Next Best deal rating in Canada and The UK at the end of last year, we are now rolling out additional dealer data insights tools in these markets. In parallel, our in person dealer engagement program expanded driven by measurable performance improvements and strong satisfaction among U. S. Dealers. All national accounts now receive dedicated support focused on maximizing platform value. Emphasizing practical guidance data driven best practices for systems integration pricing, lead management, and customer experience, including customer connections. This approach has resulted in improvements across many dealerships, For example, a multi franchise group increased CarGurus lead conversion by 200% A medium sized franchise doubled its digital deal conversion rate. And another multi franchise group achieved over a 650% increase in consumer connection rates through Sell My Car.

Following this success, recently launched the same engagement model in Canada and The UK. These efforts, coupled with seven consecutive quarters of global year over year lead growth, supported nearly 1,200 net new global dealer additions year over year a meaningful acceleration in platform adoption. Dealers have been adopting value added products and services migrating to higher subscription tiers, and extending contract durations. Retention rates have continued to improve Over 40% of new contracts signed this quarter classified as long term commitments underscoring dealer reliance on our platform despite macroeconomic uncertainty. Driver number two, meeting the evolving needs of car shoppers by powering a more intelligent and seamless journey. We are helping consumers navigate the car shopping journey with greater confidence through more intelligent, personalized experiences extending our product capabilities from initial discovery to vehicle ownership. In early stage discovery, we launched CarGurus.com backslash discover. A conversational research and search AI experience allows shoppers to describe what they want in a car and receive personalized recommendations tied directly to live inventory. This supports upper funnel discovery, makes it easier for shoppers to decide which car is right for them, and improves our understanding of consumer intent by feeding richer behavioral data back into our systems.

While we're still in the initial stages of expanding this new experience, users who engage with the experience are spending two times more time on-site. We focused on two key areas of to improve usability and consistency across the platform. First, enhancing the app with features like upgraded filtering and sorting, type ahead search on the search results page, and streamlined lead form submission. The app now accounts for over 30% of total leads and monthly active users have grown 25% year over year. Second, refreshing the homepage and core shopping pages in Canada and The UK, will align with The US experience. These changes are making it easier for shoppers to navigate and find the right vehicle. We expanded our reach further into the car ownership life cycle. In Q1, we launched a redesigned car value experience. Now integrated into Sell My Car.

Consumers can view real time valuations, drive to monthly car estimate updates, and receive offers creating an ongoing connection with CarGurus that extends beyond the initial shopping phase.

With continued product improvements, and a more consistent user experience, we are giving consumers more reasons to come directly to CarGurus. Combined with ongoing brand investments, this contributed to nearly 20% year over year growth in direct traffic and better lead conversion, This momentum continues to reinforce our position as the most visited listing site with 60% more traffic than our closest competitor. Driver number three, enabling dealers and consumers to complete more of the transaction online streamlining the final steps of the deal.

In Q1, we advanced our transaction capabilities through continued progress across digital deal, top dealer offers, and car offer. These offerings are delivering a more seamless online to offline journey for shoppers. While giving dealers more efficient ways to acquire and sell inventory. Digital transaction enablement blends online convenience with in person engagement. Helping dealers connect with more qualified shoppers, Digital Deal now supports over 11,000 dealers globally, with nearly 1,000,000 vehicle listings enabled. Following strong pilot results, we broadly released a digital deal feature integrating credit applications directly into dealer finance management systems. This addresses dealers' challenges of overlapping lenders, eliminates manual data reentry, and provides immediate visibility into shopper financing eligibility resulting in a faster, more streamlined workflow. Adoption reached 1,100 dealers at the end of the first quarter. Given the healthy uptake and higher consumer satisfaction relative to other financing options, this is now the default financing experience within Digital Deal. Through our Digital Deal flow, shoppers can take high value steps like applying for financing, placing a deposit, or scheduling an appointment before visiting the dealership. Helping them move further down the funnel with greater confidence. To drive more of these actions across the platform, 've embedded key digital deal capabilities directly into core site experiences, including trade in and financing options within the lead submission flow, and are piloting a post lead appointment scheduler designed to help dealers engage faster with high intent buyers.

As these enhancements roll out, we've seen encouraging improvements in consumer NPS and dealer responsiveness. Reinforcing the value of more qualified transaction ready leads. Digital Deal now accounts over 25% of a dealer's email leads, with a growing share coming from shoppers further along in their decision making process resulting in higher quality engagement. Giving dealers better tools source inventory more efficiently is critical to facilitating transactions. In Q1, we grew dealer adoption of top dealer offers, enables dealers to acquire inventory directly from consumers. Demand remains strong, and our measured rollout has driven healthy growth and high consumer engagement. To support better dealer execution, our in person engagement team provides onboarding and lead handling support. Dealers who complete this training have recently doubled lead conversion, improving outcomes for both dealers and consumers. At CarOff the continued rollout of insights driven by CarGurus proprietary consumer demand data drove higher engagement and demonstrated the value of our retail demand signals, pricing trends, and appraisal intelligence in enabling smarter wholesale decisions. This helped reactivate previously inactive dealers attract new ones, and led to the first year over year increase in both buying and selling dealers in over a year. Despite this progress, overall transaction volume declined as several large buyers and sellers were less active or off the platform.

The CarOffer platform, which at its core is a matrix rules engine, lacks the flexibility for dealers to adapt to rapidly shifting market conditions. And requires broader automation to streamline fulfillment and improve operational efficiency. While we made meaningful operational progress, rising market volatility has raised the bar. And those changes have not been sufficient in this environment. Over the past year, we focused on three areas of improvement. Operations, product market fit, and go to market, and we made progress in each. However, the pace of macro change continues to expose structural limitations in the model. At the same time, our insights capabilities are delivering clear value by helping dealers make more intelligent wholesale decisions. As a result, we have initiated a broader strategic assessment of a CarGurus wholesale business model that would have more sustainable growth and profitability potential. This work includes assessing business models to identify core product functionality and revenue strategies that have the potential to support a more profitable, scalable wholesale business across market cycles. To conclude, first quarter marked a strong start to our year of transformative innovation. Continuing the momentum we built throughout 2024. We delivered solid financial results and made measurable progress across our three value creation drivers.

These efforts are deepening engagement, expanding adoption, and reinforcing our market leadership in The U. S. While internationally our growth signals meaningful share gains. As we look ahead, remain focused on disciplined execution, strategic investment and innovation, and embedding our products more deeply across the consumer and dealer journey.

Now, let me walk through our financial results followed by our guidance for the second quarter of twenty twenty five. First quarter revenue was $225,000,000 up 4% year over year just below the midpoint of our guidance range as double digit year over year growth our Marketplace business was partly offset by lower wholesale and product volumes. Marketplace revenue was $212,000,000 for the first quarter. Up 13% year over year and just above the midpoint of our guidance range. Marketplace revenue growth was driven by continued strength in our subscription based listings revenue, [indiscernible] by robust double digit year over year growth in OEM advertising revenue. We grow revenue through two primary levers: adding paying dealers and increasing revenue per dealer. Both of which contributed to our marketplace growth. The mix between these levers will vary over time. In Q1, we added seven thirty four paying U. S. Dealers year over year. Marking our highest dealer growth since pre pandemic. Because CarSid is subscription revenue divided by average dealer count, and net dealer count adds more than doubled our recent historical average, Rapid dealer growth can moderate the pace of CarGurus expansion. Still, S. CarSid grew 10% year over year, driven by new dealers joining at market rates subscription tier upgrades, broader adoption of value added products and services, price increases, and higher lead quantity and quality.

All contributing to strong revenue growth. The robust growth in our international business continued in the first quarter. With revenue up 20% year over year and international CarSid up 10% year over year. Wholesale revenue was about $8,000,000 for the first quarter. Down 52% year over year and down 21% sequentially. Driven by a 26% sequential decline in total digital wholesale segment transaction volumes.

Below our expectations. Lastly, product revenue was $5,000,000 for the first quarter. Down 58% year over year and down 39% sequentially. I will now discuss our profitability and expenses on a non GAAP basis. First quarter non GAAP gross profit was 200,000,000 up 14% year over year. Non GAAP gross margin was 89%, up approximately seven twenty basis points year over year and up about 170 basis points sequentially. The meaningful margin expansion in both comparison periods was primarily due to the ongoing revenue mix shift toward our high margin marketplace business. Marketplace non GAAP gross profit was up 15% year over year and non GAAP gross margin expanded by about 100 basis points year over year to 93%. Driven by modest operating efficiencies. In our digital wholesale business, non GAAP gross margin was flat sequentially we continued to make improvements to the platform. On a consolidated basis, adjusted EBITDA was $66,300,000 up 32% year over year. Margin was 29% up about six ten basis points year over year. Reflecting primarily the favorable mix shift to high margin marketplace revenue and operating leverage on our fixed cost base. Marketplace adjusted EBITDA grew 27% year over year to 69,500,000.0 with margin up three fifty basis points year over year but down about four ninety basis points sequentially.

The sequentially lower margins were driven by seasonally higher media spend in the first quarter, related to the February launch of our big deal ad campaign. Digital wholesale adjusted EBITDA loss approximately $3,200,000 a $400,000 sequential decline driven primarily by lower volumes partly offset by lower OpEx. Moving to OpEx, our first quarter consolidated non GAAP operating expenses totaled 140,000,000 up 6% year over year and 8% sequentially. Primarily reflecting the seasonally higher sales and marketing expenses. Non GAAP diluted earnings per share attributable to common stockholders was $0.46 for the first quarter, up $0.12 or 35% year over year reflecting primarily the increase in adjusted EBITDA and lower diluted share count. We ended the first quarter with $173,000,000 in cash and cash equivalents. A decrease of $131,000,000 from the end of the fourth quarter. The lower cash balance was primarily driven by $183,000,000 in share repurchases and $8,000,000 in CapEx and capitalized website development costs. Partly offset by adjusted EBITDA and net working capital inflows of about $9,000,000 I will now close my prepared remarks with our guidance and outlook for the second quarter twenty twenty five. As always, our guidance factors in the most up to date information we have on our business and the evolving macro landscape.

At present, while the market remains highly volatile, we have not seen a material impact on our business related to tariffs. We expect our second quarter total revenue to be in the range of $222,000,000 to $242,000,000 up between 211% year over year respectively. We expect our second quarter Marketplace revenue to be in the range of 219.5 to 224,500,000.0 up between 1215% year over year, respectively.

Looking ahead, given the momentum we have experienced year to date, we are more positive about our growth outlook for the remainder of the year. While we still expect growth to moderate in the second half of the year, we anticipate exiting the year at a low double digit year over year growth rate. That said, shifts in market conditions may influence the exit rate. Moving to digital wholesale, we expect second quarter volumes to decrease sequentially. We expect our second quarter non GAAP adjusted EBITDA to be in the range of 71,500,000.0 to 79,500,000.0 up between 2943% year over year, respectively. For Digital Wholesale, we expect segment EBITDA losses to be relatively flat sequentially, as we expect lower transaction volumes to be in part offset by lower operating expenses. At the midpoint of guidance, we expect our Q2 adjusted EBITDA margin to be elevated driven by stronger than expected growth and a deliberate pacing of commensurate marketing investments. Based on our current expectations, are choosing to reinvest behind that momentum. Particularly in marketing, international product innovation, So we do not expect the same sequential margin expansion trends through 2025 as we have seen over the past two years. That said, we do expect annualized margin expansion in 2025, relative to 2024.

Finally, we expect second quarter non GAAP earnings per share to be in the range of $0.52 to $0.58 and diluted weighted average common shares outstanding to be approximately 100,000,000. With that, let's open the call for Q and A. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star, and one on your telephone keypad. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to up your handset before pressing the star keys. Ladies and gentlemen, request you to limit to one question and one follow-up question per participant. One moment, please, while we poll for questions. The first question comes from the line of Tom White from D. A. Davidson. Please go ahead. Hey, this is Wyatt Swanson on for Tom. Thanks for taking the questions. First question is about Amazon. There were recent reports that Amazon is planning to display used vehicles from dealers on its marketplace.

As an extension of what they've launched with Hyundai on the new car side, Curious how you might view their entry into this space. And then secondly, curious whether you've seen any difference in trends with new Hyundai vehicles either consumer engagement or leads on your site since Amazon went live with their offering? Thanks. Yep. Thanks, Wyatt. This is Jason Trevison. So we're certainly familiar with when Amazon is working on in auto, and I think we won't speak for Amazon. Makes sense that they started in new. It's a more organized segment of the market. Used is where we are predominantly more active, is a much different arena in much less structured data. And you need to have much tighter systems integrations with the dealers, and much more trust honestly with dealers than it's been established. And so you know, we think that what we do and use is quite difficult and is messier area than new. As a result, we think it's harder, and we think the trust that we have built with dealers over the last twenty years is a really good strength for us. In terms of new Hyundai or Hyundai franchise trends, we have not seen a change there.

Got it. Thank you very much, Jason.

Thank you. The next question comes from the line of Naved Khan from B. Riley Securities. Please go ahead. Great. Thank you very much.

Two questions from me.

On the OEM ad spending great to see the strength you had in your Q1 results We're hearing some other commentary from other players about you know, some maybe hesitation from the OEMs, lack of clarity in terms of how they're ad spending could evolve over the coming months? Given tariffs and everything. So just wanted to get your thoughts on how you're thinking about it within your guidance.

And then I had a question on on car offer. I think you talked about you know, more work that needs to be done in order to kind of adapt the product to you know, and this kind of environment. So just maybe some examples there would be great for us to understand. You know, what kind of changes it would take and maybe the amount of effort and time.

Nevada, it's Sam Zales. I'll take I'll try to take a shot at of them and ask Jason for follow on.

The OEM ad business, we're really proud of the first quarter results. I think you see them there tremendously strong. We came out of the year and into the upfront cycle. Because of our growth on the consumer end. You're seeing the number one positioning we've got our audience is growing, We're bringing it down funnel shopper. We're really proud of that. And that has translated into that reacceleration of the OEM advertising business for us. So we're really proud of the results I think obviously with the tariff situation, manufacturers are being careful and cautious I don't think that's gauging us to say much different about our pathway forward. But we're going to be careful because we know the macro industry the first place dollars get cut in a tough environment. Might be advertising, but we're really proud of where we are right now. Let me switch to CAR offer for you where you're asking a good question on our strategy to really review the revenue and business models there. I'm going to start with the first one, which is a positive, which is we talked about go to market for the last period of time. And that we were pushing for some new ways to show dealers that we had something different.

We really lacked on to something with this insights capability. It is taking CarGurus consumer demand data putting it into the dealer insights to see that in my local market there may be more purchase activity and more search activity going on for a particular type of vehicle that matched against the market day supply gives that dealer a leg up on the industry where they've told us there is no predictive predictive analytics tool set in the marketplace that does this. And it compelled us to sign more dealers from the CarGurus platform onto the CarOffered platform. So you saw net dealer ads on the CarOffered platform first time in over a year which is one good sign to our business. But let me be real frank with you as I have been over the last several quarters on this business not achieving the path to profit profitability we wanted it to. So we're looking very carefully at the platform itself and our business model to try to achieve that pathway for the future. And I give you two examples to your good question One would be operational. How are we thinking about the business a little bit differently?

And that is the flow of operations which includes inspection, title, transportation. How do we do that more effectively and efficiently And with that, the things we're examining are what does CarGurus offer do and what are we best at serving our customers doing What should we allow our clients to do? And so many cases clients will say, I want to transport that vehicle myself. I had a dealer 37 store group dealer in this week who said, can I just pick up the vehicle if it's close enough to my Midwest regional office? So there's a question for us. Can we get more efficient doing that? Should third parties do more or less of that operational activity for us? Another question we're asking. On the product market fit side, I'll just be upfront to say as we said in the prepared remarks, the structure of our platform, our matrix platform needs to be more flexible, needs to have more throughput, and needs to be automation at a higher level for today's very fluid pricing model. So we're looking at a couple of things on that front. From a product market fit perspective. The data I talked about in insights, can it be a revenue model for our business?

Can we use predictive analytics to be part of the package that we offer a distinct and unique tool in the marketplace. Can we be more seller focused with tools that we provide to sellers, which don't exist in today's market? When should I sell a product? What is the best path for that price to be sold either to another dealer or to a consumer and helping in that kind of model revenue wise. So we're looking at the entire spectrum of what the platform does today and saying can we look at it differently than we had previously to make this business run profitably for the long term. I hope you'll applaud us for finally saying, we're going to look differently at the business that we have over the last several quarters.

I appreciate the detailed answer Sam. Thank you.

Thank you. The next question comes from the line of Rajat Gupta from JPMorgan. Please go ahead.

Great. Thanks for taking the question.

I had one question initially on just the revenue algorithm you've given us, like, second quarter marketplace guidance. You know, you mentioned exiting the year, low double digit.

Curious if you could help us with [indiscernible] gonna be the equation there in terms of you know, dealer count versus CarSid. You Is one going to be a bigger driver than the other? Is it gonna be similar? You know, any more color you can add, you know, would be helpful. I I have a I have a follow-up on tariffs. Thanks.

Sure. Thanks, Rajat. It's Jason. So we're obviously very proud of the strong revenue growth that we had this quarter and the momentum that we're seeing in our business. You know, And I think one way to look at it is the growth rate Another way to look at it is the nominal dollars added in our marketplace business, both of which were really strong. So to really oversimplify it, a from OEM advertising, we grow revenue through two primary levers. Paying dealers, paying dealer count, and revenue per dealer or car SID. And the mix between these levers is going to vary over time. You know, you've seen that recently we have been adding net positive dealers each quarter. This quarter was a significant increase in the number of dealers that we added. And so since CarSid is the formula subscription revenue divided by average dealer count, then when we have a really big dealer count quarter like we did, which is two to three times higher than the last several quarters. That can moderate the pace of parsat expansion. But no there was really no change in the trajectory of CAR SID drivers like upselling packaging, cross selling, lead quantity, quality, and so forth.

And so, there was there was really no change in that. Going forward we don't, as you know, we don't guide [indiscernible] between those two drivers. But the guide for Q2 for marketplace is 12% to 15%, which again is is quite strong and consistent with where we've been.

Understood. That's helpful. And in terms of just on the tariff stuff, any insight you can give us in terms of you know, what what your conversations with dealers suggesting or or signaling Are you sensing any sort of uncertainty at all? [indiscernible] market probably looks great right now. I mean, there's some pent up demand. There's some pre buy. [indiscernible] what the behavior might look like in the second half or or the dealers are just not concerned. It was of of what turns out to be what the industry turns out to do, you know, due to the affordability and impact of tariffs. Thanks.

Sure, I would say that the prevailing theme related to tariffs is just how fluid it is. There have been announcements nearly every day. Related to new cars and parts that have been changing. And so number one is just I think learning to live with that new dynamism. And I think with that dynamism, comes future uncertainty. I don't think many, ourselves included, are trying to predict exactly what will happen. But in that ambiguity and uncertainty that dealers and others are feeling, there does tend to be a flight to quality. And that's what we offer with our our volume and our lead quality and in particular, lot of the dealer data insights that were delivering to them because it [indiscernible] it has those give them more clarity, more understanding, more ability to predict, then those get those increase in value with the more uncertainty that there is. In terms of what's actually happened, I mean consumer sentiment consumers pulled forward a lot of purchases toward the end of Q1. And into April, and then that surge sort of abated. And that was followed with a pretty significant precipitous fall in consumer sentiment, which is just another another contributor to that uncertainty.

When there's uncertainty in the market, sophisticated dealers tend to market more and do tend to organize around the leader in a smaller set of partners. Smaller dealers is more of a mixed bag in terms of how they react. Some of them try to preserve spend, some of them act more like the larger franchise, and try and get ahead of And so you know from a dealer perspective I think they are particularly concerned about new in uncertainty that comes with new. And as far as used goes, I think they're just trying to navigate that uncertainty, and we're a partner that they I think are leading into more heavily to do that. [indiscernible] comment that you made, that that is that really does not assume any change in spending patterns due to tariffs.

If I understood the question correctly, we have not seen a change in spending patterns because of tariffs.

I just meant like your outlook does not assume any future change in spending patterns. Versus what you would expect in free cash. [indiscernible] I would just point you to the commentary we made on the full year exit rate.

Understood. Okay, great. For all the color and good luck.

Thank you. Ladies and gentlemen, if you wish to ask a question, We take the next question from the line of Jed Kelly from Oppenheimer. Please go ahead.

Hey, great. Thanks for taking my question. Joined a little late, Jason, I caught the tail end of your comments thinking you're choosing to reinvest not to take 1Q as the high end of margin expansion. So can you just expound on that? Why invest? And then just going back to car offer, do you ever contemplate making it more like an auction to drive up, higher dealer or more like an auction to drive up higher dealer adoption. That would be great if you can answer that too. Thanks.

Sure. So on the first one, yeah, I mean, it's, you know, we're having a lot of success right now and we're growing both sides of our marketplace in consumer time spent, and traffic and engagement. And clearly on the dealer side, we're growing that at double digits as well and now growing rooftops as well. And so in a two sided marketplace, when you have that type of momentum, it typically benefits to not double down on that, but to invest behind that to continue the momentum and gain more of a relative market share leadership. And so our market share and market gains over the past several quarters, if we look at the growth rates and the rooftops of our competitors, gaining steam substantially and our lead has been growing substantially. And a two sided marketplace, when you have more liquidity, you become more and more valuable. And so the reinvestment may not be the perfect term. It's basically continuing to invest in the things that are working really well for us, product innovation, marketing, branding, investing in our app, investing in account management to have the team, you know, the small but mighty team that goes into the dealerships to help them improve their performance on our platform.

And we want to continue to embed ourselves deeper and deeper in a broader spectrum of the dealer workflow and a broader, you know, percentage of the consumer journey as well. So it's things that are paying off and we're going to do more Jed, it's Sam Zales. I'll take the car offer questions. A thoughtful one and I think I'd answer it by saying we're open to considering the next revenue and business models for the CarGurus business. But I want stay in an arena where we have competitive advantage. So my comment, I'm not sure if you heard it earlier, was the really nice bump that we've seen with new customers joining the platform and car offer at a greater extent than we've seen in more than a year. And I think that's completely due to this new offering of insight. And what I call them is predictive insights at a dealer, regional, level to see where is CarGurus consumer demand data suggesting there are more purchase opportunities and acquisition opportunities for those dealers. We're looking at it as completely differentiated. So that as a capability sits on top of whatever we build from a transaction model longer term.

The question about building an auction capability is less for me about should we just do what everybody else does in an auction. It's the question I mentioned earlier what parts of the transaction process should offer own and manage themselves versus third parties? Or versus other partners we might work with longer term. So I'd rather not build a need to out there in the market. I'd rather build to our strengths and things we do differently. And so you'll see us look at something like a seller focused capability. It's interesting to note when you go out to customers, there are really no market tools for sellers in a wholesale arena to say here's predictive analytics to think about when and who you should sell to. So again, there is something different on the data analytics front. But on the operational how does the transaction work. I couldn't tell you today we're gonna rebuild an auction capability that seems farther away from using our own key strengths. But we will be looking at at that transaction model that comes from our matrix today how do we rebuild something that becomes more profitable and scalable for the business?

Thank you.

Thank you. Ladies and gentlemen, as there are no further questions, I would now hand the conference over to Jason Trevison, CEO, for his closing comments.

Thank you. And we'd just like to thank everyone for joining us this evening. Special thanks to our global team who's work and hard work and commitment is what's driving all of our success, and we look forward to seeing investors and analysts on this conference circuit. Thanks everyone. Thank you. Ladies and gentlemen, the conference of CarGurus Inc.

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