Sam Zales: on our business, what we're doing is we're following our playbook from the U.S. We're listed as the ROI number one in that market. And we have been for a long time with those dealers. And so that is an element of their saying, how does that compare to the big market leader in that market? they're charging a lot more and you're producing more from an ROI perspective. So I want to test and use your product. And that's why we're gaining new customers and building car said, because we're also building new products in those markets and following the playbook here from the U S. So, um, we're, we're, our, um, visitor base is growing faster than our competitors. We're just making the investments to make a product better, uh, standing for our customers and hopefully, uh, delivers better, return and makes them come to us. So I wouldn't put too much emphasis on the incident or the communication in the marketplace that was caught up in November. We're just continuing to seek to outperform and that's our question.
Conference Operator: Understood. Great. Thanks for all that color and I'll jump back in queue.
Conference Operator: Our next question is from Andrew Boone with Citizens.
Andrew Boone: Please proceed with your question. Thanks so much for taking the questions. I wanted to ask a big picture question in terms of data. It seems like dealership mode, it seems like Discover are both kind of data plays. Can you speak to just new ways you guys are trying to interact with consumers and maybe the additional amount of information that you're gaining from more AI type interfaces and how you guys think about basically the deeper integration with customers and what that unlocks for you? And then secondly, if I look at traffic for the quarter, maybe it was down in the U.S., maybe that's weather. Can you just speak to the weather impact and what you guys saw in 1Q and how that kind of ran through the model? Thanks so much.
Jason Trevesen: Thanks, Andrew. Yeah, I mean, data is certainly a key enabler for us, but I also want to emphasize that it's not just data, it's a lot of things around the data and that we do with the data that allows us to create the products that we're creating that we think are certainly unique in the market. So from a consumer journey perspective, you know, historically we've been very good once a consumer knows which car they want. Discover is the, you know, the first example that we had that is growing certainly in its use cases very rapidly and improving quite a bit, helped upstream, help consumers determine which type of car would be good for them. But as that's expanded, it's done much more than that. It not only does that better, but it also then helps them find and helps them navigate through what we would have traditionally called the sort of consideration phase and then connect with the dealer. And then dealership mode, once they've connected with the dealer, helps them understand the full totality of information around that dealer that they would need and would benefit from in buying the car. And so in doing that, we learn an extraordinary amount about our customers. They, in a conversational exchange, they'll share a lot of information because the more information they share, the better the response will be, the better, the more informed it will be. And so we're able to take that and help them not only through empowering them, but also through guidance and recommendations, help them find a better car, better for them, better match. And then when they're into the dealership mode, we understand that dealer well, you know, we understand things about inventory and pricing and demand trends and merchandising and you know, car comparisons and financing. And these are all things that we know better than anyone, we would argue, because we have the most retail data and confuses the heck out of consumers because it's sort of overwhelming. And so we try to distill all that down. We try to be their companion throughout and it learns and our AI mode tools have memory and personalization and they travel with the consumer. So it really is changing the game, we think, from a filter-based, drop-down, episodic hunting and pecking, not to be too pejorative of our historical business, into a guided tour that answers questions and helps them get to the best answer. On your second question, you had asked if, was that a weather impact on Yeah.
Sam Zales: I'm happy to jump in, Andrew. Sam Zales, I think if I got your question correctly, we saw visitor statistics rise year over year. So we didn't see that impact on our global business and our business in the U.S. It continued to grow. I think you're referencing there were storms that did impact dealers' ability to sell a vehicle and have foot traffic walk in during that period of time. That's just a general phase. There's a lot going on in our market today with gas prices, with consumer sentiment, with inventory acquisition hard to come by. And so in both uniques and sessions, though, for us, we were up year over year and quarter over quarter. I think that's a sign of our sustenance of a best offering in what we believe is the best offering in the marketplace. Does that answer your question?
Conference Operator: Yeah. That's great. Thank you, guys. Our next question is from Marvin Fong with BTIG.
Conference Operator: Please proceed with your question.
Marvin Fong: Good evening. Thanks for taking my question here. I would love to dig in just a little more on price advantage as a first edition product. It's very exciting here, and I appreciate the update here on on the number of dealers that are now paying. I just wanted a little more color on the type of dealers that are signing up for this. Are these franchise dealers that are pretty sophisticated? And secondly, you know, were these new installs, you know, competitive displacement of an incumbent solution or was PriceVantage like the first time ever really using a sophisticated inventory management system? Just want to follow that.
Sam Zales: Hey, Marvin. It's Sam Zales. Thanks for the question. We're really proud of the growth of the PriceVantage product. Here's why it's so different than anything else in the marketplace. It is a profit maximization predictive tool. I think when we see and compare it to others in the marketplace, those are risk mitigation, look back at book prices to figure out how to stem losses and make those... as careful as possible. And I think what we're doing is trying to help dealers find that future looking with our consumer demand data. What price should I buy the vehicle for? What price should I set the vehicle for retail so I can maximize my profitability? It's truly a differentiator. We're selling to both independent and franchise dealers. We've seen success on both of those customer segments, which we're really proud about. Remember, there are two things that happen with this product. Turn times, how to improve them for dealers, and you saw the 47% VDP views and 117% faster closes of those, sale of those vehicles. versus their top competition. That's truly happening. And then gross profit per unit happens because you find the right balance between pricing and selling those vehicles. So profit is a huge outcome of our price advantage program. I think to your question of how we can continue to win share, that in some cases is a product that we're selling that a customer never has. They didn't have a product that's in there today and they don't have a pricing tool. In many cases, it's saying, I have a tool, but this one does something different, as I talked about the predictability of that vehicle. We're tending to complement something that's already there, but make it better. And I think the key to that is you thinking about the Chrome extension of this product. So you may have a tool that you're using today, but you put the CarGurus Price Vantage Chrome extension in, You're looking at a different view of pricing and predictability with consumer demand, and it helps dealers say, huh, I might want to switch because this is giving me something that's totally different in the market. So growth was tremendous there. It tripled quarter over quarter, and I think we're going to continue to push for that to be that product that is changing the way dealers are solving their number one problem in the marketplace. How do I acquire inventory at the right price and sell it at the right price?
Marvin Fong: Got it. And if I could do a follow-up here, just on stock buybacks, you guys have done a great job returning capital to shareholders in 2022. I believe you only have $75 million left in the remaining authorization, and you guys really bought a huge amount in the first quarter. How would you kind of think about you know, the path going forward, is the plan to just exhaust the remaining authorization over the balance of the year, or do you have an appetite to reload on even more on authorization?
Jason Trevesen: I mean, yeah, we have that plan in place, and we put plans in place that we hope we can use. At the same time, we are as we've shared, don't have an indiscriminate, you know, approach to it. We have an approach that says when we think it is a good investment, then we will get aggressive. And so, you know, we've never hinted at what we might do in the future in terms of expanding or introducing a new program. So what we've shared is the 250, we're through 175. So yes, we have 75 left. And, you know, that 75 will adhere to the same philosophy, which is at prices that we think are more compelling, we're going to get more aggressive.
Marvin Fong: Okay.
Conference Operator: That sounds great. Thanks, Jason. Thanks, Matt. Thanks. If you'd like to ask a question, please press star 1 on your telephone keypad.
Conference Operator: Our next question is from Joe Spack with UBS. Please proceed with your question.
Joe Spack: Thanks. Good afternoon, everyone. Maybe just to follow up on that last topic, you know, the cash balance you finished the quarter at models, right? I think that's the lowest since 2020. And obviously you generate some healthy cash flow every quarter. But we'd just be curious if you could give us some indication to sort of, you know, you know, minimum cash levels you sort of feel like you want to operate the business at.
Jason Trevesen: Thanks, Joe. We clearly do think about what are right cash levels, what are minimum cash levels. Just to back up quickly, we think about three categories of how to use our cash or our cash production power. The first is investing back in the business, so that goes into our operating margin calculus. The second is M&A and powder for M&A. And then the third is returning capital to shareholders. As you said, we do generate nice free cash. We are very proud of the free cash flow conversion rate that we have. From a minimum perspective, we think about it as cash we have on hand as well as cash we have ready access to. We have had a line of credit, which is very easily accessible, and that's, we think, a prudent thing to do. In terms of minimums, we've never shared what sort of a hard floor is here. With a line of credit, that makes a hard floor a much more sort of fluid or almost theoretical solution. threshold because you've got access to so much more and also it relies on you know timing of working capital and so the the we can have pretty large cash swings we control it but if it dips down artificially because of timing then it comes back very quickly because of timing so you know we we think about risk mitigation and as a balance to us being aggressive when we think shares are underpriced. Fair enough.
Joe Spack: Um, and then just, um, you know, appreciate all the commentary on, on AI and, you know, the, um, the, uh, integration and the apps and, um, but, and, and, you know, please, if, if this is sort of, uh, unfair because it's sort of too early and, um, you know, please, uh, you know, feel free to respond to. So, but I am just curious, like, And I know you sort of said adoption is still pretty low, but I think you did say it's sort of growing fast. But are you able to see yet anything about, like, conversion rates or, you know, acquisition costs for dealers as a result of these tools? Or it's just not there yet, and that's not sort of a fair question to answer yet?
Jason Trevesen: Yeah. I don't know if I can speak much to what dealers are experiencing, and I think even if I did, then you'd see a huge, huge range. But what I would say about us is that it remains a very small percent of our traffic and a very small – the LLMs remain a very small percent of our traffic. They remain a very small percent of our leads. It does tend to be high quality traffic. We show very well in the LLMs in terms of visibility and traffic, receipt of traffic, our share of the traffic that comes from there. But they're very top funnel, top of funnel. And it is not really a substitute for a marketplace. So whether it's us showing up in an LLM or our app in ChatGPT, App Marketplace, or some of the LLMs are testing paid search now, and we're going to be right there front and center because we tend to be at the leading or bleeding edge of these things. We're showing up well, but they're small. And so in any of those situations, it's top of funnel and it's not a substitute. They need to come to a site where they're going to go through the workflow. They're going to go through the process where they have the trust and confidence where they can compare and look at pricing and deal ratings, and we have vehicle history and ontology and so forth. And so, you know, data can be scraped. We provide access to some data, but that's very different than a marketplace that has inventory, has contracts with dealers. We're normalizing data. We're validating pricing. We're deduplicating listings and managing real-time availability and things like that. And so... I think the people who are using it, who are the early adopters, are getting smarter on it, and then they're coming to us to really go through the process. And that's why we're both embracing it in terms of our presence in LLMs, but also building our own capabilities and applying AI across our own user experience and dealer workflow so that we stay ahead of the horizontal LLMs as well.
Conference Operator: Thank you. There are no further questions at this time.
Conference Operator: I would like to turn the floor back over to Jason Treveson for closing comments.
Jason Trevesen: Thanks very much. I would just like to thank everyone who tuned in this evening and thanks to everyone who Ask great questions. As always, we like to really show particular appreciation to not only our shareholders, but also our customers and especially our employees and their passion and hard work that is helping us execute as well as we are today. So thank you very much, everyone. Have a great evening.
Conference Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
