CarGurus, Inc. (CARG) Q2 2026 Earnings Call Transcript

Operator: Good day, and welcome to the CarGurus Second Quarter 26 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the call over to Javier Zamora, General Counsel and Corporate Secretary. Please go ahead.

Javier Zamora: Good afternoon, and thank you for joining us. With me on the call today are Jason Trevisan, Chief Executive Officer and Samuel Zales, president and chief operating officer. We will be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to risks and uncertainties, and our actual results may differ materially. Information concerning those risks and uncertainties is discussed in our SEC filings. We undertake no obligation to update any forward looking statements Except as required by law. Please refer to our press release and our investor presentation on the Investor Relations section of our website for a reconciliation of GAAP to non GAAP measures. I will now turn the call over to Jason.

Jason Trevisan: Good afternoon. We delivered strong second quarter results with revenue growing 13% year over year to $251 million above the midpoint of our guidance range including another robust quarter in our international business, which grew 28% year over year. Adjusted EBITDA increased 7% year over year to $85 million at the high end of the guidance range. At a 34% margin, reflecting disciplined investment. We also generated strong cash flow, converting 103% of our adjusted EBITDA or $88 million to free cash flow in the quarter. In the first half of this year, dealers have taken a more deliberate approach to incremental spending decisions. We believe market trends like dealer margin pressure and fewer days on lot coupled with onetime developments like recent FTC mandated all in price transparency requirements, made dealers more cautious about spending. We view these factors as temporary, not structural. Despite these pressures, dealer engagement continued to grow on our platform. Average sessions per dealer on our platform were up 28% year over year in Q2. Driven by increasing AI functionality in our products, and expanded capabilities across more of the dealer workflow. We continue to grow wallet share, which we believe is driven by our strong ROI and new dealer product introductions. We believe we remain well positioned to continue capturing a disproportionate share of incremental spend as the environment improves. Our full year revenue growth guidance is unchanged, and we remain confident in our long term opportunity. We have also begun to realize meaningful benefits from our investments in AI, which is helping us accelerate the pace of innovation, enabling our teams to bring new products to market faster while improving engineering efficiency and operating productivity across the business. Combined with our focus on operating discipline and organizational efficiencies, these productivity gains have generated greater leverage than we anticipated at the start of the year. As a result, we are raising our full year profitability outlook and now expect full year non GAAP adjusted EBITDA margins to compress approximately 50 to 150-basis-points in 2026 relative to 2025. We believe our ability to accelerate innovation thoughtfully and operate more efficiently positions us well for all market environments. More importantly, the investments we have made are reinforcing a virtuous cycle across our platform. As we have used AI to innovate faster and bring new products to market more quickly, we are seeing deeper engagement with our platform from both dealers and consumers. In addition, we continue to capture rich first party shopper signals. Nearly 500 million signals each day across demand, pricing, inventory, and shopper behavior. That inform and continually improve our dealer software and analytics and consumer experience. This creates a differentiated data advantage that we believe helps dealers make better decisions while enabling a more personalized and trusted consumer experience. We believe faster innovation leveraging our proprietary marketplace data makes CarGurus increasingly valuable to both dealers and consumers. And strengthens our competitive position by providing a better car shopping experience for both consumers and dealers. As we continue to expand beyond our leading marketplace business, our strategy is built around 3 value creation drivers. First, we are expanding CarGurus offerings into integral parts of the dealer workflow. Connecting inventory, marketing, lead conversion, and data pillars through mutually reinforcing products. Second, we are focused on transforming car shopping into a trusted AI led journey from research through consideration and purchase. Giving consumers greater confidence and increasing the value they get from CarGurus. And third, we are deploying capital with discipline with the aim of growing long term earnings power and stockholder value. I will now walk through our second quarter progress across each of those drivers. Driver No. 1, expanding CarGurus offerings into integral parts of the dealer workflow, connecting inventory, marketing, lead conversion, and data pillars through mutually reinforcing products. We have increased dealer engagement with our platform. Reflecting our focus on embedding data and insights into more of the dealer's daily decision making. We are leveraging our differentiated data on retail dynamics, pricing, inventory trends, and deep consumer insights to inform smarter and more predictive dealer decisioning. Which we believe results in an ultimately stronger ROI for our dealer customers. In fact, among subscribing independent dealers, those in the top quintile of engagement with our platform had a 78% higher leads per unit than those in the bottom quintile. Suggesting that use of our expanding dealer product suite not only drives adoption among more people at the dealership, but also drives performance on our platform and ultimately dealer profitability. Within the inventory pillar, our focus remains on helping dealers source, stock, appraise, merchandise, and price inventory more effectively. In the second quarter, price advantage bookings grew more than 50% sequentially with a higher AOS as the product has continued to prove its value. Dealers that adopted price advantage saw a 15% lift in VDPs and 9% lift in leads per listing after adoption. In our marketing pillar, we recently introduced VINMAX, our newest AI powered product that helps dealers improve merchandising performance and achieve turn time goals without dropping price and sacrificing margin. VINMAX identifies high potential but underperforming VINs and dynamically boosts them across organic sort, highlight, and audience targeting. Since we began rolling out VINMAX to early access dealers in February, promoted listings have sold 23% faster and received 34% more leads per day than comparable nonpromoted listings. In the conversion pillar, we introduced a new competition filter to shopper signals that helps dealers understand how many other dealers a shopper has submitted leads to. Allowing them to better assess urgency, allocate sales resources more effectively, and convert customers to sales at a better rate. Within the data pillar, we are building on our data advantage by equipping dealers with deeper competitive insights, helping them benchmark their performance to competitors on metrics like leads per vehicle, or recently sold vehicles on competitor lots. So they can make more informed pricing and inventory decisions. We have seen a greater than 80% open rate on the weekly competitive digest email illustrating how our data has become a critical input into dealers' daily operations. Collectively, these new products have extended CarGurus beyond our marketplace and into daily dealer decision making. Which we believe will fuel growing dealer engagement greater product adoption, stronger retention, and more dealer wallet share over time. Driver No. 2, transforming car shopping into a trusted AI led journey from research through consideration and purchase, giving consumers greater confidence and increasing the value they get from CarGurus. Buying a vehicle remains 1 of the highest consideration purchases a consumer makes. A process that often lasts several months as they research, explore, select, and negotiate their final deal. Consumers want confidence in their search, transparency in their results, and trusted guidance throughout that process. In July, we launched Guru, our end to end consumer facing brand for all of our AI capabilities across the CarGurus platform. Guru currently exists in 2 forms. As an AI native experience, formerly known as Discover, and as a seamless overlay to our existing site. Together, fueled by real time dealer feeds and a robust methodology in ontology, they serve as a trusted guide that helps shoppers research better, understand and compare their options faster, make more informed shopping decisions, and complete their purchase in the dealership with greater confidence. Engagement with Guru continued to grow rapidly. With Guru driven leads up 60% sequentially in the US. In addition to better shopper to lead conversion rates, Guru provides much richer signals about user preferences and intent that bolster the depth and quality of the lead we send to dealers. Given the strong usage in The US, we recently launched our conversational AI experience in the UK and Canada. Allowing shoppers to shop by describing their needs and use cases which is not solved easily with traditional 1-size-fits-all filters rather than searching by vehicle specs. In the consideration step of car shopping, sell my car continued to gain traction. Improving the selling experience for consumers as we made enhancements to the consumer experience that increased funnel conversion and drove significant incremental leads. These improvements also gave dealers more efficient access to sourced inventory at a time when acquiring used vehicles remains a top dealer challenge. At the point of purchase, dealership mode extends the CarGurus experience into participating US dealer lots by putting pricing transparency, deal ratings, payment estimates, and Guru powered vehicle comparisons directly in shopper's hands. Consumer engagement with dealership mode in our app more than doubled in the second quarter. Further cementing us as a trusted tool for both consumers and dealers. Which we believe will deepen engagement and facilitate more closed deals and cars sold on our expanding platform. Driver No. 3, deploying capital with discipline with the aim of growing long term earnings power and stock stockholder value. We believe our subscription business model is resilient, and we expect it will continue to generate strong free cash flow that will fund our long term growth initiatives, while also allowing us to return capital to stockholders. In 2026, we have increased our investment in product, technology, and development to continue accelerating AI expansion on our platform and supporting a faster pace of product innovation. We have also increased our investment in sales and marketing to support the launch and adoption of new dealer products and create consumer awareness of our Guru and other AI user experiences. In addition to organic investment, we plan to maintain the flexibility to pursue disciplined M and A for compelling strategic opportunities. Finally, we remain committed to returning capital to stockholders through share repurchases. In the second quarter, we bought back $29 million in shares, increasing our year to date repurchases to $24 million of the $250 million available under the 2020 share repurchase program. Since 2022, we have repurchased approximately $925 million in shares. Representing more than 30% of shares outstanding reflecting confidence in our long term strategy, strong financial position and commitment to disciplined capital allocation. We are excited about our accelerated innovation velocity and how that has translated into progress across all 3 value creation drivers. By introducing new AI driven products and features that help dealers operate more effectively and give consumers greater clarity and control throughout their shopping process, we believe we will continue to deepen our role in the car shopping journey. We have embedded our data and AI more deeply into dealer workflows, driving deeper engagement from more people at the dealerships. Our expansion into software and data, all unified by our underlying data layer, is demonstrably improving the marketplace performance of adopting dealers and growing our TAM and wallet share potential. And among consumers, we are creating more personalized, trusted, and transparent experiences across more steps of the shopping journey. Backed by strong free cash flow and disciplined capital allocation, we will continue investing in the product innovation and AI capabilities that we believe will generate the greatest long term returns and create durable long term value for our customers and our stockholders. Now let me walk through our financial results. Followed by our guidance for the third quarter and full year 2026. Second quarter revenue grew 13% year over year to $251 million above the midpoint of our guidance range driven by adoption of add on products. Our OEM business outperformed our expectations benefiting from consumer interest in certified pre owned vehicles amid ongoing new car affordability challenges. In the second quarter, U. S. CARSID grew 8% year over year and we added 673 paying U. S. Dealers year over year. We continue to increase our dealer base while taking greater wallet share. In the second quarter, adoption of add on products was the largest driver of year over year CarSD growth. Followed by listings upgrades, like for like price increases, and higher lead quantity and quality. For the third consecutive quarter, add on product adoption was the largest driver of the sequential increase in CARSID. Our international business had another robust quarter with second quarter revenue up 28% year over year. Driven by strength in listings and Sell My Car in Canada and OEM advertising in The UK. I will now discuss our profitability and expenses on a non GAAP basis. Second quarter non GAAP gross profit grew 12% year over year to $231 million Second quarter non GAAP gross margin was 92%, down about 90-basis-points year over year. Second quarter non GAAP adjusted EBITDA grew 7% year over year to $85 million toward the high end of our guidance range and adjusted EBITDA margin was roughly 34% down about 200-basis-points year over year. Second quarter non GAAP operating expenses totaled $154 million, up 16% year over year. Reflecting higher sales and marketing expense and increased investment in product technology and development expense to continue the accelerated pace of AI product introductions. Second quarter non GAAP net income per diluted attributable to common stockholders was $0.66, up 16% year over year. We generated strong cash flow converting 103% of our adjusted EBITDA or $88 million to free cash flow in the quarter. We ended the quarter with $122 million in cash and cash equivalents an increase of $50 million from the end of the first quarter. As $29 million in share repurchases was more than offset by our cash generation. Since 2022, we have now repurchased approximately 30% of our shares outstanding while we continue to grow revenue and profitability. As of the end of Q2, we have $46 million remaining on our 2026 authorization. And we will continue to repurchase shares when we believe it is an attractive investment and consistent with our capital deployment priorities. I will now turn to our guidance for the third quarter and full year 2026. We expect third quarter revenue to be in the range of $253.5 million to $258.5 million up between 9% to 12% year over year, respectively. Our guidance reflects a more measured pace of dealer decision making which we view as temporary, not structural. We believe dealer engagement and retention remain healthy and we expect contracted new product revenue to layer in through the second half supporting our full year outlook. For the third quarter, we expect our non GAAP adjusted EBITDA to be in the range of $82 million to $90 million We expect third quarter non GAAP earnings per share to be in the range of $0.63 to $0.69 and diluted weighted average common shares outstanding to be approximately 90 million Turning to the full year, we are reiterating that we expect 2026 revenue to grow in the range of 10% to 13% year over year. We are raising our full year profitability outlook. We now expect full year non GAAP adjusted EBITDA margins to compress approximately 50 to 150-basis-points in 2020 relative to 2025. Our updated guidance reflects more efficient execution within our investment year plan while preserving our ability to invest in the most attractive growth opportunities. With that, let's open up the call for Q&A.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a You may press *2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary pick up your handset before pressing the star keys. First question, Andrew Boone with JMP Securities. Please go ahead.

Andrew Boone: Thanks so much for taking the question. I wanted to double click in terms of the macro. Is there anything else that you can help us understand about what dealers are seeing and what those conversations are kind of looking like And then secondly, how do we think about the duration in terms of this downturn? Are you guys seeing any improvement of late? Or has it been more of the same And then just a bigger picture question. As we think about users in the greater adoption of AI and your guys' kind of transition to more of a natural language search, can you just provide us an update in terms of what that is doing to the consumer experience? Is that improving conversion? What else are you guys seeing as you guys unlock more of an AI experience for consumers? Thank you.

Jason Trevisan: Thanks, Andrew. Jason here. So, on macro, what we saw in the first half was that--you know, the data would support all this. At dealers, units tended to be up. Prices tended to be up. And days on lot tended to be down. And so what inventory they did have especially lower priced inventory, tended to sell well. And when that happens, they tend to be a little less reliant on marketing. At the same time, there is been margin pressure at dealer groups. And there is been GPU pressure at dealer groups. And so they have been looking for opportunities to save on OpEx. And then you throw in, you know, some of the FTC and that is what is led to them just being a little slower in decision making. A lot of the trends that I just mentioned in terms of units and prices and days on lot those they fluctuate. They change, you know, by the month and by the quarter. We have started to I would say some of those factors improved over the course of that first half of the year. And so as we look at, you know, how we are executing, you know, we still are introducing a lot of products. We are still No. 1 from a listings perspective, still No. 1 in leadership and ROI, lead quality, lead quantity. Regaining market share, then we are growing outside of listings too. So you heard us talk about some of the products that we are introducing in inventory and conversion. And so as a result, you may have heard the stat about engagement is up significantly on our platform because more people at the dealership are using us more frequently You know, how long will it last? I mean, like I said, it improved over the course of the first half. And so I do not know if there is a binary sort of happening and it is not. But it did start to improve in the first half. You know, what is AI natural language search doing to our search? You know, we have given some stats that those that are engaging deeply with Discover tend to convert a lot higher. I think the bigger and more exciting thing is that we are gaining just so much more information on the users. And we are able to leverage that they are giving us in the course of the conversation we are leveraging that to, a, give them a better search result and experience on our site, and then, b, pass that and along to the dealers that the dealer can give them a better experience as well. And we are seeing that the dealers that are engaging with that like in shopper signals and things like that, are converting those leads much better. And so the beauty of that is that the dealers and our customers get a lot more value out of the platform, like, the same platform and the same users as before. Without having to pay more and without us having to invest more because we invested in a better search experience. Thank you.

Operator: Next question, Rajat Gupta with JPMorgan Chase.

Rajat Gupta: Hi, good evening. This is Josh Patva on for Rajat. Thanks for taking our questions. I was just curious about the profile of the dealer signing up for PriceVantage. Are these primarily dealers already on the higher priced premium tiers? Or is adoption more broad based? Just trying to gauge whether the uptake suggests a potential stand alone market for some of your other products that are currently being bundled? Thanks, and I have a quick follow-up.

Samuel Zales: Thanks, Josh. it is Samuel Zales. Appreciate the question. It is a mix. And that is really exciting for us on price advantage. You saw the 50-plus percent growth in bookings. The breadth of our opportunity there. Remember what the value proposition here is. it is the first product in market that provides predictive analytics to dealers. and has them look at the difference between wholesale and retail pricing It uses consumer trends and demand to say to a dealer, where is there more demand for specific vehicles in your market? What should you be stocking up? And so the opportunity is broad based. it is independent to franchise dealers across all segments and those that are looking for a way to grow their profitability. Jason talked about the challenges in the economics in the market. So thinking that you are offering a product that combines with our listings package we are now able to help you provide a profitability increase to your business is working phenomenally. And that is what is part of the engagement story that Jason shared. So it is really broad based. And it says to us this is a product that gets us to a broader set of decision makers within the dealership. And if it compels both sides of the marketplace, independents and franchises, we feel like that is a value proposition we are excited to take forward.

Rajat Gupta: Awesome. that is very helpful. Thank you for that. And I appreciate the initial color on, you know, AI leads Jason provided to the prior question. But just as a follow-up to that, with the track you are seeing with Guru, are you at a point where you are starting to monetize AI search results or AI search placements?

Jason Trevisan: Well, I mean, we have woven AI into many of the search paths right now and search features. And so it is not about monetizing an AI search result separately from how we monetize other user activity on our site. it is instead creating a better user experience on our site so that they are ultimately have a better chance of finding a car that is great for them and converting to connecting with a dealer. So unlike, say, Google traditional search results and Gemini being 2 different things, we have woven AI into our core user experience which allows it to get, you know, leveraged by and exposed to a broader portion of our audience. And just improve any search that is done. So the volume that you heard sequentially was up significantly, So more users are using sort of what we call the deep AI search features. But it is really affecting all searches there. it is not separate. Great. Thank you. Good luck.

Operator: Once again, if you would like to ask a question, please press *1. Next question comes from John Babcock with Barclays. Please go ahead.

Analyst: Just first, was wondering, you did talk about more efficient execution on the plan. And I was just wondering if you could elaborate more on that and what the drivers were?

Jason Trevisan: Sure. So we have, you know, I would say pretty aggressively looked at how we can infuse AI and agents into workflow across our business. And it is largely and it is it is working well. I would say it is largely been focused on how we increase our product velocity and our productivity. But we have also found it to help with efficiency in other parts of the org outside of product and engineering. We found that we are able to save in software versus where we expect we would. And now some of that is offset by AI by, you know, token usage and other AI software. But it is largely coming through productivity and efficiency. There are some areas, including in, you know, go to market efficiency as well. there is some areas like in customer support where this is a form of software replacement. But where we are able to get a lot more efficient than what we were able to do with third party software, third party partners or services. With our own internally built agents. So there is some concrete ones there. And the thing that we are really excited about is we have been able to do that without in any way sacrificing on the product velocity and accelerated product introductions that we talked about at the beginning of the year. In fact, if you, you know, if you look at all the new products we have introduced in the last 12 months, it is very long list, and that has helped fuel on both the dealer and consumer side. And that has helped fuel that add ons is our biggest driver of CARSID. And we have such great traction with things like price advantage where bookings were up 50% sequentially. Gotcha. Thank you. And then just quick follow on here. Just on the M&A side, you did talk about that very briefly, but I am just kind of curious if you could remind us what sort of deals you might be looking at, what sort of skill sets and capabilities you might be looking at So we always have our radar up for good opportunities that fit into our strategic plan and our strategic plan is pretty ambitious on both the dealer and consumer side. But I would say from a, threat or, like, a richness of opportunities, mingled with our strategic focus, I would say the more likely opportunities are on the dealer side. And so it would be, technology solutions, software, that help serve the dealer that likely tend to be smaller, more point solutions. But they would help us accelerate you know, accelerate our expansion into our 4 dealer pillars faster. We have a really exciting organic roadmap in all 4 of those, and we have products in all 4 of our pillars already. But we wanna go faster. And we also wanna make sure that we are you know, tying these 4 pillars together through our common dataset and through integrations with other systems and so there is there is quite a bit of work to get to the robust platform we see ourselves getting to. And if we can get there faster with an acquisition, we will. You know, this is not anything too novel, but the important things to us are great technology and a great team. Okay. Thank you.

Operator: Next question, Naved Khan with B. Riley Securities. Please proceed.

Naved Khan: Great. Hi. Thank you for taking the question. This is Ryan James Powell on for Naved. Wanted to kinda drill into the sales and marketing investments. You would frame them as both focused on product or focused on dealer and consumer reach. So I guess first, any difference in traction from franchise versus independent dealers? And then also, good to see some growth in the unique users and sessions in the quarter. So how much of that was driven by organic traffic versus paid? Thank you.

Jason Trevisan: Thanks, Ryan. it is Jason. No, I would not on your first question, I would not say there was a difference on our traction between franchise and indies. We have always served both of those segments and you know, top to bottom, large to small within each of those segments. Really well. that is 1 of the benefits of our platform. And then Samuel mentioned or answered earlier, price advantage has been broadly embraced. And so you know, even a product like that is been a new pillar for us is not is not all that segment specific at all. So I would say it continues to be market wide, the appeal of our products. In terms of users and sessions, you know, just as a reminder, we do not focus on driving upper funnel traffic. We focus on the value we deliver to dealers. If we you know, achieve that by having more traffic and more sessions, that is fine. But we can also achieve that without doing it because it is really a small percentage of our total traffic that converts to connecting with the dealer. But we did we did grow our investment in marketing as well as in sales. I would say more of that growth has been on brand and brand building. Our direct and owned and app and organic traffic tend to continue to be our fastest growth. And, yeah, beyond that, I would say, you know, at the channel level, we do not get into that of the detail. Understood. Thank you.

Operator: Again, please press 1 if you would like to ask a question. Next question. Christopher Pierce with Needham and Company. Please go ahead.

Christopher Pierce: I just wanted to get a sense as you have been introducing these new products, can you for a lot of us, maybe we specifically know how many products or the level of detail that dealers are really taking. When you sort of get down to it, we hear that they take lots of different products. that do not really talk to each other. Are you guys, like, I think I know the answer, but just love to hear you guys talk about this. I understand. Is it a novel solution, or is it the uniqueness is that you are able to leverage the data you have to offer a much more powerful solution versus what is on the market now. Because if it is door number 2, I guess, does that imply that there is a long tail of products you can sort of take share from, like, legacy 1 off like, tougher products that dealers are taking? Like, what are some other areas you might be able to push into if that assumption is correct?

Jason Trevisan: Sure. Hey, Christopher. it is Jason. So yeah, I mean, well, let me let me back up. To just offer a reminder, which is the 4 pillars, the 4 categories of dealer products that we see huge opportunity in are inventory, marketing, lead conversion, and then market and competitive data. Most of our products historically have been in marketing. All of our products across and we have products in each of those pillars. And I will give some examples. All of those products benefit from the data that we have in our marketplace, and the specific data in the marketplace that is so helpful are the retail trends, the inventory trends, and the pricing trends. And embedded in retail is demand. And so the reason that is so important to call out is because every decision a dealer could make in any of those pillars is gonna be much smarter if they are able to say how much that car will sell for and how to best sell it. So the example is if a dealer's able to know that a particular car can sell in 10 days for $32 thousand then they will know that they are willing to spend $30 thousand for it at wholesale because they are looking for a $2,000 GPU. that is an oversimplified example, but hopefully, you get the point. And so any products that we build related to inventory are informed by this like, golden piece of data, which is how much that car will sell for 30 days out when they are ready to retail. Similarly, in conversion, if we are able to tell them how to convert interested parties to buy that car better than anyone else because we see the demand trends, and we have the deep information on consumer because they engage with our conversational AI. Then they are gonna convert those much better and make much more money on their same investment in our marketplace. So we are bringing this dataset that is born out of the $500 million data points a day that we garner in our marketplace to each of the pillars. So if you look at inventory as an example, we talk about 5 or 6 key things that need to be done in inventory, which are sourcing, stocking, appraising, pricing, merchandising, syndicating. Price advantage is just the first step in that, and we believe we have that same data advantage in all of those categories. Within inventory and within and inventory is north of a billion-dollar business in The US alone. And so the you know, when you look at how is price advantage value prop today, it uses real time data and recommendations. it is predictive, not reactive. And the results are proven in real time, which is another benefit. So you make a pricing decision You make a pricing change, We tell you, we think this will grow your leads by 30%. And you see those leads grow by x percent, the following day. And so, you know, VINMAX and other product that we introduced in marketing VINMAX says, we can see the retail demand trends, and we know it is gonna be hard for you to sell this VIN if you do not market it more aggressively. So VIN Max says, we do not need you to make the decisions at the dealership anymore. We will make the decisions for you, and prioritize the toughest to sell VINs based on the demand data that we have. So when you look at you know, the new products we have introduced to dealers in the last 12 months, price advantage, new car exposure, Again, new car exposure is based on knowing the demand trends for new cars. VINMAX, which I just mentioned, shopper signals, and performance insights. Those all are based on having a better sense of what is gonna sell at what price and to whom than anyone else. And that is why dealers more people at the dealers are tapping into our system. 28% more activity on our system versus a year ago. Because it is giving them the intelligence to make these smarter decisions. Okay. Yeah. Thank you for the detail. Can you just talk about then you know, dealer perception of data and dealers' trust in data versus 3 to 5 years ago and how things have come to where they are now is there room for dealers to even become more data dependent? Like, on a scale of 1 to 10, are dealers at, like, a 6 now, or they at a 2? Like, where have they been, and where are they going to Like, where are they now? So I think it depends on the dealer. Maybe to state the obvious. I think all dealers tend to be data driven. I think the challenge that many of them would say they face is they get disparate data from disparate systems, and it does not always foot. It does not tie together. And so that is 1 of the key things that we think a platform like ours that has this singular data layer across all of it helps solve. So, you know, I think you know, sophisticated dealers have been a 7, 8, 9 out of 10 users of data. And but the challenge they would say is this source data says 1 thing and this source data says something else. And so you know, in our products, when there is a recommendation made in price advantage, it is the same recommendation that would be made in our marketing in our listings product. Or if we are making a suggestion to do something to a price on a VIN because that VIN is not moving well, that is coordinated with the VINMAX system which says, actually, you know what? Do not move price on this. we think it is more economical for you to market it more. And so and, again, this is where the quick feedback loop comes back in because with a lot of other disconnected systems, if something says you should do that you merchandise a car this way, and they make a change, they may not see the results. Whereas, on our platform and with our products, any change they make is directly observable in their leads and listings before. Okay. Perfect. Thank you. Thanks.

Operator: Thank you. I would like to turn the floor over to Jason for closing remarks.

Jason Trevisan: Thank you. Thanks, everyone, for joining the call this evening. Thank you very much for the questions. And as always, we always want to thank our customers for their trust in us and also our employees who work so hard to build and deliver all of these wonderful products and the great results. Thanks, everyone. Have a great evening.

Operator: This concludes today's teleconference. You may disconnect your lines at this time, and we thank you for your participation.