CarGurus, Inc. (NASDAQ:CARG) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 05:00 pm ET

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CarGurus, Inc. (NASDAQ:CARG) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Our first question comes from the line of Tom White with D.A. Davidson. Please proceed with your question.

Analyst
Tom White

Great. Thanks for taking my question. Good evening, guys. Just two on international, if I could. I was hoping maybe, Langley, you could just help us understand your latest thinking about adding more international markets over the next, say, two to three years versus focusing your international investments on kind of scaling your existing countries more quickly and maybe accelerating their path to profitability? And then, just sort of secondarily, can you maybe just give us a sense of how UK is doing in terms of their sort of timeline or ramp to profitability versus what you saw in the US? Thanks.

Executive
Langley Steinert

Yeah. So let me take the first question and then actually have Sam handle the second one about UK. I mean, generally, it's hard for us predict where we may or may not go in the future internationally. But, I think, globally it's probably safe to say that our focus would be more on taking the investments we have in the existing markets and trying to push them towards both scale and profitability. So that's probably the best place to leave it.

Executive
Sam Zales

And Tom, I'll pick it up, Sam Zales, on the UK, specifically. I think comparing it to the US businesses, is hard to do. The US business sort of simmered for many years with a different business model, and we aggressively went into these models knowing that in the UK in this market and others, the pain point exists, the consumers do not have a transparent experience and dealers are anxiously awaiting a high ROI connection -- consumer connection growth partner to work with.

I think you heard from Langley's prepared remarks that we're growing lead volume in the UK by north of 100%. We've done that for quarters consecutively. I think, when you look at the business, we mentioned in our Investor Day that unit economics are moving all in the right direction, which means how we look at the revenue per connection versus the cost per connection, all moving us on that path toward profitability. The lead growth, the visitor growth has been tremendous, and I think most importantly, dealer adds and AARSD all moving in the right direction. So, the markers are all moving in the process we wanted them to. You just can't compare it to the US. I hope that's a fair answer.

Analyst
Tom White

Okay. Thank you.

Operator
Operator

Our next question comes from the line of Naved Khan with SunTrust. Please proceed with your question.

Analyst
Naved Khan

Yeah. Thanks a lot. Just a couple of questions. So, lead growth of 13% that looks quite strong related to the growth in unique visitors. Can you just maybe call out some of the contributors to how lead volume is exceeding visitation? And then, I have a follow-up question after that.

Executive
Jason Trevisan

Sure, Naved. Hey, it's Jason Trevisan. We -- a couple of ways, number one is, we are always