CarGurus, Inc. (CARG) Earnings Call Transcript & Summary

Welcome, everybody. I'm Aaron Kessler, senior Internet analyst at Raymond James. Pleased to have with us for our next presentation, CarGurus. And presenting for CarGurus today will be Sam Zales, President and COO. Welcome, Sam. Maybe to start off, if you just want to give -- talk a little bit about the evolution of CarGurus, kind of the strategy and the vision that how it's evolved from maybe a single platform marketplace, and now you've obviously evolved more to digital retail in the wholesale market as well. So if you can walk us through a little bit on the evolution and then we'll jump into some more Q&A. Thank you.

Thanks, Aaron. Appreciate it, and thanks for the time and the opportunity. We are really proud of the evolution of the business and the trajectory that we're going, which tells us we're moving in the right direction. You've known us and for most people who have known the CarGurus business as a listings marketplace, if you will, a place for buyers and sellers to come together. We use a value proposition that stood us in great stead with the consumer part of the business and the dealer part of the business. We won the consumer audience in the listings business by providing more transparency to the process for any automotive purchase. We ordinate our search results in a way that gives the best deal to that consumer first, that's very different than our competitors around the world. We provide more information on those purchases. We might share how long a vehicle has been on the site, how long has it been for sale, have price drops happened over time. We provide the process of every listing saying, is it a good deal or a great deal using our instant market value and also saying, what's the consumer experience with that dealer so that they're knowing is this a great experience with that deal and a great deal for that vehicle. By doing that, we won the largest share of the consumer sessions, and more than 50% of the sessions coming to CarGurus, we know consumers start online today. So we found the largest audience in a continually growing audience, and that begets the dealer side of the marketplace who are signing up for the highest ROI marketing subscription, SaaS subscription, if you will, to win the consumer audience and acquire customers. But 2 things have happened over the last number of years as COVID hit and the chip shortages happened to our industry. One, inventory is at the lowest level it's been in 30 years in our industry, both new cars not being produced and a lack of used cars that is available for those dealers to sell to those consumers. Number two is the consumer is moving and getting more comfortable working online, whether that's getting a price point like we've offered them over time or selling my vehicle from the convenience of my home or buying a new vehicle digitally. We found our consumer research 80%, 80-plus percent of consumers are looking to do some part of that transaction online, maybe do the complete transaction. Only 1% today in the market are buying online fully digitally. And we know that many of them would like to do more of that process online. So the CarGurus evolution has been a break into -- working off of that foundation of our core listings business into 3 big areas of our business going forward. One is digital retail. We now have provided through pilots and programs that are up and running today an ability for a consumer to get prequalification on their financing, which makes them a much further down-funnel shopper. We give them an opportunity to put a deposit down on a vehicle. We give them an opportunity to see vehicles from across the country with our Area Boost product. We allow them to do through a convert -- what we call our Convert program, and I can go into more detail later on, an ability to start the purchase online but end up in the dealership. So they're having a digital wallet, if you will, test drive an emotional purchase, walk out and have a DocuSign to sell that -- to buy that vehicle. So that process is moving and takes us into the future where the online retailers are. But the 2 other legs of the stool that have been really tremendous growth areas for us are the digital wholesale business, which came to us through the acquisition of CarOffer, a tremendous business out of Dallas. If you've seen the trajectory of that business, it's changing the entire world of how dealers get access to inventory, used car inventory. The old days was I'd go to an auction house, I'd sit, I'd watch the vehicles go by, I pick my paddle up. I say if I'm buying that vehicle or not. Yes, there are auction sites that have gone digital. CarOffer does things totally differently. It's an instant trading platform. The results have been phenomenal as thousands of our dealers get on that platform, and the growth has been astounding because it's a very different product in the marketplace. That has got us our third new leg of the stool, which we call Instant Max Cash Offer, the ability for a consumer to sell their vehicle from the convenience of their home. The benefit and the difference that CarOffer gives us as opposed to any other instant cash platform that's out there, it is hundreds of dealers competing for that consumer's purchase when they want to sell their vehicle, complete digitized transaction, a pickup, a payment and an inspection right at the consumer's doorstep and drive it away. I just sold my car on the platform yesterday. So all of those businesses have made us from what was traditionally a listings business into a transaction-enabled marketplace, which we're so excited about following that path of consumers and dealers. Sorry for the long overview.

Yes, no problem. Thanks, Sam. Good overview. So maybe just quickly going back to kind of the state of the used car market. You talked about kind of inventory being kind of at the, basically, all-time lows in both new cars and used car inventories. How has that impacted your business, both kind of the marketplace as well as some of the newer offerings?

Well, so we're...

Sorry. And the second part, just when do you expect maybe some of this to normalize as that are key questions we're getting from investors.

I'll take that first, Aaron. Our best guess is we talk to the OEMs in the marketplace and we look at the processes that are going on today to try to resolve the chip shortages, it's probably going to last through a good part of 2022. We thought it might come out late this year, but it looks as though while manufacturing has started by some of the OEMs, you're likely to get the first nice move in manufacturing of new vehicles in later 2022, hopefully, before 2023. That will have a domino effect with more used cars coming into the market from off-lease or people buying new cars sometime as the later part of the year happens. But I'd say the great thing for CarGurus is, and I don't think we intended it this way, is we've got a hedged business. Yes, the listings business is challenged when a dealer is saying, I've got 30% of the stock I used to have, 50% of the stock I used to have. I don't need to spend as much in marketing. CarGurus is driving the largest audience. You're building me a great ROI, but I don't need the seventh, eighth, ninth lead on a vehicle because I'm going to sell one of those to consumers who's already come in. So I'm going to probably reduce some of my spend over time in the core listings business. But let me tell you my biggest problems. Can you get me a set of inventory that I can't find today in the marketplace? So the biggest challenge is get me new inventory so I can keep my sales going and stay profitable. And so we're doing that through both the dealer-to-dealer wholesale auction through digital means, through CarOffer's platform. And you're seeing more of our dealers, about 1/3 of our dealers that signed up for CarOffer this last quarter came from the CarGurus platform to sign up. So they're seeing a unique and unbelievable way to acquire inventory and I go into more detail on that in a minute. They're saying, "Can I get unique inventory that's not just dealer-to-dealer?" Yes, you can get that in Instant Max Cash Offer because CarGurus is putting this Sell My Car offering in front of 30 million-plus vehicles. To a dealer, and we did this research before we bought CarOffer, if you can give me access to inventory that's not anywhere else on the marketplace, I'm singing in the bathtub, it's the greatest thing I can ever have in business. So Instant Max Cash Offer gets us there. The last piece is digital retail. We're able to provide more of these offerings because dealers have fewer people in their showrooms right now. They reduced their sales team starting in COVID and now through this inventory shortage, so we're allowing them through digital means to sell more vehicles and increase their profitability over time.

Got it. Great. Thanks, Sam. And then maybe a couple of questions on the kind of the core marketplace business, then we'll jump into some of the other areas as well. Maybe first on the core marketplace business, how does CarGurus differentiate its service from some of the other leading auto marketplaces? And how do you communicate that differentiation to consumers?

Well, I think the listings business has proven -- and I should say as I go back to this, let's cover TAM at some point because the listings business is a $3-plus billion business. We've created the largest share. It starts with the consumer audience. So if you win the largest percentage of consumer sessions and we've got 50-plus percent of those more than our next 3 competitors combined, we know that you're telling a dealer, you can live without some other platforms, some other automotive marketplaces, but you can't lose the CarGurus audience. That's why our retention of customers has been so great. Our consumer research we just did said that CarGurus -- 94% of consumers say CarGurus is the last place I visit to be sure I'm right before I buy my vehicle. So that consumer audience is the starting point to winning that marketplace business. It ends, though, with return on investment. Every dealer who's smart enough to say I'm spending money on marketing knows that our price point and our packaging and our services allow them to win business and close new customer acquisition more efficiently than every other player in the marketplace. We think that will always be our winning formula. And then we've got to keep adding new digital marketing capabilities, new abilities for those dealers to see that consumer and drive it to their dealership and close business.

Got it. And then driving traffic to kind of the core listings business, you've done a nice job of driving kind of more high-intent users. How would you say traffic sources have evolved? You've obviously gotten a lot more efficient in your marketing spend over the last couple of years.

Well, we have because, Aaron, we rode on the backs of high demand -- coming out of COVID, there was pent-up demand for consumer acquisition. That may not be the case as we go forward as consumers are seeing the price points on retail purchases going up. But we have been able to hone exceptional profitability and efficiency in the way that we acquire those consumers. One is we've spent years honing and what we call our algorithmic traffic acquisition business to focus on down-funnel shoppers, and that's been the hallmark of our business is we're not just focused on having more visitors than anybody else we're focused on driving value to our dealers and return on investment. So we're going down funnel. That effort is abated by all of our tremendous efforts on the content that we've built over 15 years in business that drives a consumer to our organic traffic. But most importantly, we're seeing our organic channels, our own channels being more aggressive in our business over time. When you've got tens of millions of consumers signing up for e-mail to tell me more about a vehicle at this time when prices are going up, how can I get the right deal on a vehicle to trade in at these unusual times in our market and using the app and using their e-mail correspondence with us to find a way to be effective. I'll be honest to say, in this market, more consumers being afraid to purchase, and we've seen that 30% of our consumers are saying, I may hold off on my purchase at this very high price point, we're going to have to spend more to keep that lead that we have, but we've done it in such an efficient way. We think we'll continue to do so.

Got it. Great. And then just in terms of a number of paying dealers, I think you're kind of in the mid-20,000 range and you've kind of been there for the last couple of years, has come down a little bit with COVID, obviously. How should we think about the right number of paying dealers in the U.S. market longer term where there's kind of over 40,000 dealers, I believe so? What's kind of a reasonable number to hit longer term?

Yes. Good question, Aaron. We've always said there's low 40,000s in the market. That's consolidating. Actually, that is a trend that's happening. There is more consolidation happening given the breakout of what's going on with inventory and COVID. We sort of look at it and say, yes, we're down from where the COVID period was. Right now, dealers are not itching to say at my low inventory, I can't wait to get on the new platform. We're holding our own, but our efforts will be over the next period of time as we exit from this inventory crush is we believe 30,000 is the right kind of target to say, let's long term go for a bigger set of those dealers we lost during COVID or we're not spending at all and not in the market. And then let's go continue to win share as we always have over time and build up our acquisition. So we believe there are a couple of growth areas for that core listings business. One is reacquiring or acquiring more as we go forward. Number two is over time, thoughtfully growing what we call QARSD, the quarterly annual spend that a dealer makes with us. We're doing that by getting them into further products with us and penetration and higher price points over time. We're being thoughtful about doing that.

Got it. And on that point, when we think about kind of the opportunity to further drive revenue per dealer, how much of that should we think about increasing from the core listings business, maybe raising pricing or additional advertising solutions in addition to some of the other newer opportunities, including digital retail and wholesale?

I'll put the digital retail business, which we all call our new transaction-enabled marketplace, to the side for a bit, but you will see us get commercial there as we think about that in 2022. I look at it as 3 levers. One, if you keep growing a great audience, you earn the right to add price points every year to your dealers. And we're doing that thoughtfully right now because we have to sort of understand that inventory stage of the market and the spend levels of our dealers over time. But if we keep driving that audience, we get the renewals on those accounts, but we'll do that deliberately. Number two is increasing the penetration of products those dealers get. So we have a digital marketing product called real-time performance marketing, RPM. It allows dealers to look at our audience, the most unique and largest in the industry, to match them against Facebook and going to get that first-party cookie and make that work effectively for us and then for our dealers to drive traffic to their websites. And then importantly, some new products like Area Boost and others that drop them into this digital retail realm in an early stage. And then we also will get them into premium paid product spot. So one thing we haven't done as much of in the past, as said, for featured listings, which is the sponsored listings at the top of our page much like Google does, saying to those dealers, if you want the opportunity to get there in a crowded market, you're going to have to pay more, whether that's an auction or a minimum price ban to get there, that's how we grow QARSD in the same product set, if you will.

Yes. And you've also kind of -- you still have a freemium model, but you have kind of maybe taken away some of the benefits on the premium side as well?

Yes. We look at companies like Dropbox and others over time who say, look, you can give something away for free to gain adoption, but at some point, you've got to reduce the value of that program, as long as we keep consumer value to what we're doing. And so our efforts have always been consumer-first. Let's have a great experience, let's have enough inventory. With our freemium model, we have more inventory than any other player in the marketplace -- as a marketplace. And so what we did over the last -- I think, during COVID period and mid-2020 was to say, you can still use the free program, but there's limits to it. At time, once you hit a certain number of leads, and we know you can close some of those leads through the free program, if you want more and you want to accelerate your profitability as a dealership, you have to sign up for the paying program. That's worked phenomenally well for us from an acquisition perspective, but it's also allowed us to say, we're keeping the inventory on there, so consumers still see the largest breadth of choice in the marketplace.

Yes. Got it. Great. And then maybe just a couple of minutes on the digital retailing side, which you hit before. Can you just talk a little bit about maybe the evolution of the product, kind of where you're at now? You obviously rolled out a few products, including Area Boost financing, CarGurus Convert, some of the newer products such as ConsumerLane, your delivery pilot, a lot going on there. Where are we at? What inning are we in? And kind of where do you see more of a finished product? And where are kind of penetration rates at today for you guys?

Yes. I love your analogy. We're in the top of the first inning, I think, in digital retail. I give a lot of credit to the online retailers who got there first. I don't know if they figured out how to make money in the business, but they are saying, we can adopt that less than 1% that today is thinking about an online purchase. What we're doing is being thoughtful and deliberate about how we bring these to market because what we're trying to do is create a differentiated offering for the consumer by partnering with our dealers. And that's such an important message to the marketplace is Area Boost was the first tool that was out there that we said, for dealers who are able to deliver vehicles across the country -- today, consumers are looking outside of a 30-, 50-mile radius. I'm saying, we're going to get the best deal, even if it's got to be delivered to my home right to the doorstep. And so we work with thousands of dealers who were saying, I can do that today, and let's build a product to grow your share of audience by allowing you to market your vehicle across the country, which benefits CarGurus by having a broader set of car-sitter spend. But consumers get to see all of that inventory across the country, which is great. So that's where we started. Now as we've gone into what we call limited entry or access products as we want to make sure we always build products for maximum consumer experience is we're doing the prequalified financing process. We're now doing a penny-perfect trade-in process. So the consumer knows what if I'm trading in a vehicle and buying another one, what's the price point I got there. We're now doing deposits where we're allowing the consumer to say, I'm committed to that vehicle, here's a $500 deposit. We know we're going to make that sale. We're offering a delivery capability with logistics where we allow a consumer -- sorry, our dealer partners who don't deliver vehicles to use our third-party partnerships to go out and deliver vehicles across the country to open up their opportunity. We're now doing hard pull financing. So what you're seeing is our entry and continued movement to say, we have the capability for you to trade in and buy a new vehicle, do it all online or -- and a difference between the online retailers is the Convert pilot, which today says, if you want to digitally initiate your transaction, but it's an emotional purchase, you want to feel a vehicle, you want to test drive it, that digital wallet will be right there for you. Once you take the test drive, you can click out and you've got the purchase taken care of. Aaron, the one thing I want to leave you with on digital retail and where we are and where we're going is we think we can differentiate from the market of online retailers in this way: selection. We're giving consumers every opportunity to see, from us, 5 million vehicles when our competitors, the online retailers, have 20,000 or 30,000 vehicles. We're giving them the choice of where am I going to finance. So when you go to an online retailer, you've got their financing, the APR they're charging. We're saying we're going to go out to multi-lenders, and there are multiple lenders in the marketplace, you choose the APR that's best for you. We're going to give you the best deal on that front. We can give you the convenience of all those transactions happening from your home and the best trusted and transparent experience that CarGurus is known for. So we're early innings, but we're going to take this on because...

Yes. That makes a lot of sense. And then just maybe on that investment -- obviously, the next logical question from investors is kind of what are the economics that you can make from digital retail? You have to -- obviously, you're sharing the revenues with the dealer versus many online retailers that are trying to maximize for themselves. How should investors think about the revenue opportunity from digital retailing and how you look to split that with the car dealers?

Yes, terrific question. You're talking about splitting it with the dealers, which is the most important. We're going to partner with dealers to offer these services. We think this is at least an $800 billion market. As we look at it today, as you look at all of the transactions happening, 40 million cars transacted in the market today, we look at it a couple of different ways. We think, at some point, this will be a percent of transaction, much like any other e-commerce business we'll take on. We'll probably charge some subscription for dealers to promote their vehicles in our digital retail format because there is a price of entry to getting in there. We want the commitment and the skin in the game to do that. But that's how we think of the business. It's taking a percentage of the transaction at some point but splitting it. So when you think about things like financing, we're letting dealers keep all of their profits to do that. But when you go out to multi-lenders and you say, we're bringing a new consumer you didn't have before who's going to finance through you, we get the royalty from our partners that we work with from the financial lender perspective. So there's multiple revenue streams there, but we think of it as more as the commerce engine of percent transaction.

Got it. Maybe just talk for a second on the delivery pilot and how that's going as well.

Yes. The delivery pilot, for us, is saying we want to have the best of both worlds. For those dealers who can deliver and they keep to a customer-satisfied experience, which CarGurus is known for, we're going to offer the Area Boost solution. But we thought that we'd want to control that consumer experience by partnering with third parties and doing it in the light capital model. We're not building the logistics engines you've seen in some...

That's why CarGurus has branded trucks going around?

You got it. Not right now, but we will look at that marketing, which is a really good question. But work with partners we trust and know and work, and we've learned this from the CarOffer business because they're doing it today with dealer-to-dealer and consumer-to-dealer. So we're doing that and offering it to a limited set of dealer partners who think you'll give me that logistics capability, you're bringing the consumer in my doorstep, you're giving me incremental sales I never had before. So it's limited. We're going to continue to grow that in 2022.

Got it. Great. And then maybe on to kind of the wholesale side of the business, which is more recent with your acquisition of CarOffer, at least 51%. If you can provide an offer, maybe how CarOffer differs from some of the other wholesale platforms such as ACV or some of the more traditional auction marketplaces that have also kind of acquired some digital platforms as well.

I couldn't be more proud to talk about that team because I get the opportunity to work with them on a day-to-day basis in Dallas. It is completely different from any solution out there in the marketplace, Aaron, and I want people to know what that is. One is, as I said, there's the old line physical auctions that many of those traditional large players in the marketplace are saying, okay, I'm going to create my own online auction capability. It's much like a Zoom screen. You're going to still have to sit there as the buyer in the retail organization watching those vehicles go across. It's a timed auction, so I have to be there at a particular time. I'm not sure I see the credit report. I'm not sure it's a good experience. But I'll maybe pick off 1 or 2 of those and buy those over time. What CarOffer created and why we're so excited to have them in our portfolio as a subsidiary is they created an instant trading platform. It works much like a stock exchange. And this is from years of Bruce Thompson, the serial entrepreneur who's built multiple businesses and sold them in our industry, has spent years building this capability and honing it over time. What it allows a dealer to do is say, here are all the vehicles I'm looking to buy over time, by spec and detail, make model down to the trim. Here's the colors I want. Because I know what I can sell, let me see what I can buy from the market that's out there today. And here are the vehicles I have to sell on my lot today or that I have access to, here's my price point I'm looking for over time. The system itself, and I call CarOffer a lot like CarGurus in early days, it uses data and technology to create an instant trade platform, a light capital model for inspection, so they'll use third parties to do that inspections around the country, a light capital model of transporting that vehicle across the country, and the average transaction on the CarOffer platform is about 600 miles. They're using geographic dispersion to say, a vehicle worth something in Chicago is worth something very different in Florida. And these trades are happening because we're bringing thousands of dealers onto that platform and payment process in a digital means. So all of that model working to create tremendous transaction volume. You've seen the growth of that business that started as a $30 million business last year, much, much, much bigger this year. The difference, again, between them and some of these other players you mentioned that are new players in the market is the price point. First of all, we're selling a frontline-ready vehicle. It's $20,000 and up on the vehicles on average that the CarOffer has transacted. But number two is light capital model. We're not building reconditioning centers. We're not building our own logistics. We're working with infrastructure that's out there in the market. That's why you have a profitable business that's growing so fast. We're growing faster than all those players and we're profitable. So I'm really excited.

Does CarOffer focus on kind of the newer -- relatively newer cars? A lot of the traditional auction historically have been focused on maybe older cars, maybe that native reconditioning, et cetera.

It's -- you're relatively right there. It's relatively newer product, relatively higher price point in comparison to others in the marketplace. It's not saying they won't. We think that every one of our dealers will have product they can sell and buy on the platform, but they have had their growth traditionally from more of the franchise dealers saying, I need a higher-end vehicle, a frontline-ready vehicle, so that reconditioning process, while we do it and the inspectors have worked phenomenally so our arbitration rates are low, we don't need to build these huge centers to repair every single dent on a small low-end $5,000 vehicle.

Got it. And what is the -- how does the pricing work to dealers for CarOffer? And then can you just talk a little bit about the margin structure of CarOffer as well?

Yes. It's -- I think that one, again, is a differentiator because we have a flat fee for buying and selling. So these high-end vehicles where the old traditional auction houses would say, oh, you're going to transact a $20,000 vehicle, your fee goes up for the buy-sell. Ours is a $275,000 -- sorry, $275 fee for -- we can maybe get there at some point -- for both the buy and the sell. It's flat based on -- it doesn't matter if it's based on the value of the vehicle. There are transportation pass-through charges, there are inspection pass-through charges. And that allows -- and then there -- in some instances, the way they work is there's a spread to that vehicle because we're the middleman making that happen. And so the margin to that business is a profitable bottom line business. I think we've said the gross margins are in the 20s, mid-20s or so. It doesn't work like our listings business, which you know is a 92% gross margin business, but it's a fast-growing gross revenue business, a profitable bottom line business with a nice gross margin, too.

Got it. Great. And then maybe finally just on the relatively newer product is the CarGurus' Instant Max Cash Offer, which has rolled out, I believe, last quarter and then kind of more of a full rollout here in Q4. Maybe similarly, kind of can you compare how IMCO kind of works relative to other players in the market as well?

Yes. Terrific question, again, on how we differentiate ourselves. We couldn't be more proud of what Instant Max Cash Offer is doing, not easy to say, but we brought something totally different to market again. Today, when a consumer says, I want to sell my vehicle, they either go to an instant car cash offer product from one of the automotive marketplaces, which is an estimate. It's just, here's what we think your vehicle will worth, but you got to take it to the dealer, they're going to negotiate with you, they're going to figure out if that's the right price point. Likewise, with the online retailers that you know of, they're giving a single price point, and we've tested this where our price point is against the others in the marketplace or CarMax is out there and they'll say, drop the vehicle off at the closest CarMax vehicle. What we're differentiating here is CarOffer already has those thousands of dealers on the platform. Their matrix is already built into this stock exchange system, as I said, the buying matrix is there. So all of that vehicle, when a consumer is willing to sell it, is up against all of those bids in the marketplace and you're going to get the highest bid for your vehicle. So number one, for the consumer value proposition is I get the highest bid from thousands of dealers who are competing for my business. Number two is I don't have to drop it off that logistics and inspection process is part of the CarOffer platform, I can come to your driveway, pick it up and create a digital transaction. I chose...

Are you guys hiring inspectors in each geography?

No, that's the light capital model. We're working with our third-party partners. We work with them the dealer-to-dealer business. And so we work with those partnerships we know are trusted and the process works. And then we're dropping that vehicle off at a local dealer. They have the choice to keep that vehicle or sell it back into the matrix, and there's a benefit of doing that, sorry, since the entire group of dealers in the marketplace. The benefit being to the dealers is I now have a platform that lets me compete with CarMax, the online retailers and anybody out there in the marketplace. We actually have added one more piece to it, Aaron, which is ConsumerLane. It's a product that allows Instant Max Cash Offer and the benefit of 7,000 dealers bidding on that platform to get -- sit right on my website, if I'm a dealer. So if a consumer comes to my local ABC retailer and says, I want to sell my vehicle, now I can be backed by all of those bids in the matrix, and I make that trade and then I can probably sell the new vehicle as well.

Got it. Great. And then any -- in terms of territory expansion, where are you at today with Instant Max Cash Offer?

Terrific. So we run that business like we've done everything in our career here at CarGurus, which is consumer expectations and experience first. Our NPS scores would make Apple jealous of how we're doing so far, and that's important to us. So we rolled out to 3 states, got to 8, then went to 19. We're now at 23 states. And we've continued to see those great results. We continue to see gross margin coming in. We continue to see dealers and consumers both transacting positively. And so you will see us roll out nationally at some point in 2022.

Yes. And when we go to the website now, it's pretty obvious on the site now, it's a pretty bold large writing, sell your car 100% online. What type of engagement are you starting to see with that on the website?

Well, we -- it's really interesting. Our effort is we can always use paid search to find a way -- or paid marketing acquisition to find a way to win more business. What we're finding is with 30 million-plus consumers coming to our doorstep, and this is what I've said, consumers want our digital wholesale capability because we're bringing in -- and there's network effects of bringing in these consumers they've never seen the vehicle for. So 30 million consumers, we're putting more real estate on the site against the Instant Max Cash Offer. We're using those owned channels I talked about previously on e-mail and the app capability to get consumers to see. I can get an all-time high price for selling my vehicle, which is fantastic. So those are working and converting very effectively. Our dip of our toe into the marketing through paid channels is working in the same way. And all of that effort is make the consumer experience perfect and they'll convert and come out of it. You'll see us spend more in the new year on this because it's so much of a growth business for us and an engine where we're following the trend of consumers. So you'll see us spend more and continue to invest in it, both on the site and in paid means as well.

Great. Well, lots of balls in there, I guess, Sam. Going to keep you guys busy for the next year or so.

Fortunately, all that go in the direction of where the consumers and dealers are going and are becoming from what was an interesting listings business into a very interesting transaction-enabled marketplace. So we couldn't be more excited about the business.

Great. Well, thank you for the comments today. Do we leave anything out? Do we think we covered a lot?

I think you hit most of the big ones there, and we're excited to see where this trajectory takes us. But you see our employees, who I want to thank for all that they do here, more and more excited about being a part of the story. The listings business was very interesting. We're the leading player there. But now you latch on 3 new huge business areas on top of it, gets people excited to innovate in a very big way going forward. So I thank you for the time and the opportunity.

Great. Thank you again, Sam. We'll talk to you soon.

Thank you, Aaron. Thank you again.

Take care.