Greetings and welcome to the CarGurus First Quarter 2019 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Rodney Nelson. Thank you. You may begin.

Thank you, operator. Good afternoon and welcome to CarGurus' first quarter 2019 earnings call. We'll be discussing the results announced in our press release issued today after the market closed and posted on our Investor Relations website. With me on the call today is Langley Steinert, CarGurus' Founder and Chief Executive Officer; Jason Trevisan, Chief Financial Officer; and Sam Zales, President and Chief Operating Officer. During the call, we will make statements related to our business that may be considered forward-looking, including statements concerning our financial guidance for the second quarter and full-year 2019; management’s expectations for our future financial and operational performance; our business and growth strategy and our plans to execute on our growth strategy, including our ability to expand our global audience; our ability to realize benefits from our acquisition of PistonHeads and successfully implement related integration plans; our brand awareness efforts; including investments in audience and brand building across our U.S. and international businesses; our ability to achieve our 2019 strategic initiatives; our investments in and ability to drive adoption of new and existing products and their benefits; our expectations for our consumer finance offering, including our ability to expand through additional lenders; the value proposition of our products, including the ability of new products to drive AARSD growth; the growth levers we expect to drive our business; our ability to maintain existing and acquire new customers; our expansion into international markets and our international growth strategy; our expected expenses; our ability to successfully grow our product and engineering organization; and other statements regarding our plans, prospects and expectations. Forward-looking statements may include words and phrases such as we expect, we believe, we intend, we anticipate, we plan, may, likely and upcoming and other similar terms. These statements reflect our views only as of today and…

Thanks, Rodney, and thanks to everyone for joining us today. 2019 is off to a strong start for CarGurus, as we exceeded our first quarter guidance for revenue, operating profit and earnings per share and we are raising our full year 2019 guidance. We are growing our leadership position in the U.S. as we continue building both sides of our marketplace, including solid audience and paying dealer growth and we are delivering strong progress in our international segment. We are committed to bringing trust and transparency to the car shopping process, which we believe will drive an unparalleled consumer experience in our industry and translate into a critical offering for dealers. In 2018, we achieved several important goals, such as dramatically increasing our brand recognition, developing three new digital marketing products, launching marketplaces in two new countries and delivering strong financial results. This year we have set our goals that we believe we'll build upon our leadership position and help our business grow over the long term. Before I review our first quarter results in depth, I'll go over the strategic initiatives we have laid out for the business in 2019. As a reminder, each year our business leaders identify the most important initiatives that can meaningfully impact enterprise value over a multi-year time horizon and thus deserve dedicated organizational attention. These initiatives are also vetted by our board at the beginning of each year. As we did in 2018, we've identified five areas of strategic importance that the company is focusing on in 2019. Two of these initiatives center on our core U.S. business. First, we still have a meaningful opportunity to grow our brand awareness and increase connection volume; and second, we are focusing on increasing monthly recurring revenue with our paying dealers through our evolving listings offering…

Thank you, Langley. I'll provide a detailed overview of our first quarter performance, followed by our guidance for the second quarter and updated outlook for the full year 2019. Please note that we acquired PistonHeads on January 8th and our results and guidance include PistonHeads impact from that day forward unless otherwise specified. Total first quarter revenue was $135.3 million, up 37% year-over-year and roughly $5 million ahead of the high end of our guidance range. Our marketplace subscription revenue grew 36% year-over-year to $120.8 million and advertising and other revenue grew 53% to $14.4 million. In the first quarter, we observed better than expected U.S. advertising revenue as OEMs continue to shift ad spend into digital channels and recognize our audience leadership position and the resulting strong performance of our platform. Unlike previous years, we observed more ambitious OEM spending to start the year and our ad sales team delivered large OEM advertising deals that were not in our pipeline entering the quarter, factors that benefited our advertising revenue. We're pleased with our first quarter advertising performance, but we also note this revenue stream is not recurring and will be less predictable than our marketplace subscription segment on a quarterly basis. Parsing performance by geography, the U.S. accounted for 95% in total revenue in the first quarter. U.S. revenue rose 35% versus the year-ago period to $128.4 million. International revenue grew 95% year-over-year to $6.9 million inclusive of PistonHeads. As we noted on our previous earnings call, we expect PistonHeads to contribute mid-single-digit millions of dollars to revenue over the full year. While we won't to break out financial performance for PistonHeads on a quarterly basis, the business is performing to our plan since we closed the deal in January. Turning to our paying dealer count. We surpassed 33,000…

Great. Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Mark Mahaney from RBC Capital Markets. Please go ahead.

Hey, guys. This is Mike Chen on for Mark. Thanks for taking my question. I have two. So it looks like there is a pretty strong net ads performance internationally. I was wondering if you can break down a little more of how much of that was PistonHeads versus organic. I know you said it was the strongest like organic quarter, but just any more color there? And then in terms of the consumer financing offering, I was wondering if you could talk a little bit about the pricing structure and how that works and what type of revenue or financial impact we can see from that? Thanks.

So on international. This is Jason. On international, we're not breaking out PistonHeads but we did try and give some directional guidance for folks that – in saying that it was our strongest organic quarter, so you can roughly probably back into what the PistonHeads contribution would have been. And then the second question on consumer financing was the question specifically around the revenue model?

Yeah. Just the revenue model and then like what type of pricing trends and how that works? Yeah.

So the revenue model at this stage of our development is largely a lead generation model where we get compensated for funded loans, which is fairly standard in the industry. There aren't – you asked about trends, I mean there aren't really trends, because it's a new launch for us. But we feel very good about our ability to drive funded loans given the volume of connections and leads that we're generating for our dealers. And when you look at the sort of the unit pricing of how large a loan is - your typical loan is what percentage of cars get – have loans associated with them we think there's a sizable opportunity here.

Our next question is from Tom White from D.A. Davidson. Please go ahead.

Great. Thanks. So one on guidance and then maybe a bigger picture one for Langley. Just on the guidance, if my arithmetic is right it looks like the non-GAAP operating income for the year that raised maybe a little bit less than the magnitude of the first quarter beat, Jason. Is there any kind of color you can give there? Obviously, you've got a lot of stuff to invest in, but has you're kind of plan in what you're going to invest in changed a bit since last quarter? And then, kind of, bigger picture. This is a big week in the world of mobility and sort of evolving models for transporting people from point to point. I was hoping, maybe you guys could just share your latest thoughts on this trend, this broader market trend. How you think it might impact the role of dealership over, say, the next five to 10 years and how your business might look to adjust? Thanks.

So, hey, Tom, it's Jason. On the first one, we tried to give a little color that spoke to the fact that, given the seasonality of the industry, our marketing -- particularly the consumer marketing spend is not perfectly linear with revenue. And we try and market when consumers are more likely to buy cars. So part of that is a seasonality thing. To some extent, there's a little bit of a small timing issue between Q1 and Q2 as it relates to consumer marketing. But you should expect and we expect that our consumer marketing will be a higher percent of revenue in Q2 than it was in Q1. And so, it's probably going to be a better indicator, if you'd look at first half margin, I would say, and even then you've still got some seasonality, rather than looking at just Q1 when you've got a little bit of seasonality and a little bit of timing that created an inflated margin this quarter.

So Tom, its Langley. I'll take the second one on mobility. I assume you're referring to Uber. I think we've been pretty consistent since the IPO in terms of our outlook on ridesharing and autonomous vehicles. And I think companies like Lyft and Uber are going to continue to do well in urban settings. I think, in urban settings, for the most part, they're going to continue to displace traditional livery services like cabs. I don't see for the foreseeable future, ridesharing being a particular threat to car ownership. Just because I think if you live outside of a densely urban market, the ability to hail even an Uber on quick notice, I've noticed myself, is not particularly great. So I think in an urban setting it probably works. In a suburban or rural area, I don't think it works particularly well at all. So I think in city dwelling, it continue to be popular, but probably no more than traditional livery services. As I said, I think, it probably represents a bigger threat to traditional cabs services than necessarily car ownership.

Okay. Thank you.

Our next question is from Jed Kelly from Oppenheimer. Please go ahead.

Great. Thanks for taking my question. I guess, just on your U.S. traffic. Can you give us a sense what's growing faster between your direct channels and your paid channels? And then, I guess, as you get to a certain amount of scale, can you just talk about -- you have 38 million monthly active users the ability to sort of drive connect -- more connection volumes. And can you still optimize the site to send more connection volumes to dealers?

Sure. So, it's Jason. Hi, Jed. On the traffic source trends, as you know, we don't break those out. But what we have said is that, our organic channel has been decreasing over time. And more share has been consumed by both paid channels and direct. It's also worth unpacking paid and organic into both branded and unbranded. And so, a used Ford Focus 2015 search versus a used Ford Focus 2015 CarGurus search. And while, we can't break those out in organic, we've been paid, we know that branded is one of our highest growth channels because of the positive effect that our TV advertising has had. And we have every reason to think that that's the case in organic as well. So direct is growing. Paid is staying strong, both of those are stealing share from organic and then branded is stealing share against non-branded across all channels. As it relates to headroom in the consumer market, I think, there's two -- sort of two angles in which we believe we still have a lot of headroom. The first is -- because I -- we would agree that thinking about 35 million 40 million uniques coming to our site a month when there are fewer than that cars bought each month in the U.S., might -- you might ask how much room there is to go. But the two that we look at number; one is, unaided brand awareness. And that is still really quite low and we think that we have -- we know we have a long way to go there to catch up to the incumbents and to ultimately hopefully be a leader there. And until we have that, we feel that we have both volume to grow as well as propensity and intent to grow. The second thing is around the fact that most people who buy a car still don't submit a lead on a site like this -- like ours. And so the more things that we can do on our platform around features, more things that for the consumer more things that we can do to make it easier for dealers to handle a lead and to create a positive experience for the consumer is going to create more consumers who are interested in submitting a lead. And so we have a lot of effort against that about -- around improving conversion and improving the user experience for the consumer. Because that's still less than half of the circumstances.

Thank you.

Our next question is from Dan Kurnos from Benchmark Company. Please go ahead.

Great. Thanks. Obviously, we have the metrics that you guys have given around international, but maybe if you could just give us some more color on kind of how the market has reacted since your acquisition of PistonHeads and you guys have put some more money there how either dealers or consumers are reacting? And then I know you guys called out international AARSD, obviously, is always going to be lumpy on strong dealer growth. But now that you have kind of critical mass there in a couple of other places do you think you'll continue to maybe consider using that as a tool to drive dealer growth? Or is it really just going to be necessitated by size of dealer and geographic mix?

Hi Dan. Sam Zales. Thanks for the questions. International growth was mentioned in the comments both organic and with PistonHeads has been solid for us we're proud of the results. I'd say PistonHeads acquisition has been positive for us on both the consumer brand and the dealer branding perspective. One, PistonHeads is an iconic brand. It's got a significant following. It's got a user base that's highly engaged with the content and capabilities on the site. And that will only continue to reinforce the positive nature of the CarGurus brand that has made tremendous inroads in the U.K. Dealers look at that twofold. One is there's product sets on both sides and they can take advantage of the consumer audience that we're driving to both the U.K. site -- CarGurus U.K. and the PistonHeads site. So, with the product offerings and the technology and data expertise and customer acquisition, consumer acquisition expertise we'll bring to PistonHeads we think this is a big opportunity. They also see this as investment in our furthering number one growth rate. We are the fastest growing consumer website in the automotive marketplace space in the U.K. This is further investments with a halo effect of investing on the consumer side means growth on the dealer side. From an AARSD perspective, you're asking a good question, but it's a reminder that we have multiple countries moving at the same time all in different stages of our development. We've talked about this previously. We first acquire inventory to bring our freemium model to base so consumers have a better experience in that marketplace. We then build out the consumer experience on the website. We then acquire the consumers and that drives the connections to dealers to sign them up as paid dealer base. As Jason says lumpy results in AARSD is the fact that one, each market is at a different stage of development. But number two is we are not going to use that lever initially. Our growth in those markets in the early stages is to sign dealers up at a cost-effective return on investment of their customer acquisition program and then over time just like we're doing in the U.S., growing AARSD through the growth of connections, the growth of new products which we launch over time in those markets, and the growth of the unit price economics. But we're in the early stages, so you'll see that AARSD at a slightly lower level than you'll see in the U.S. and it will be lumpy over time.

Super helpful. Thanks Sam.

Our next question is from Ralph Schackart from William Blair. Please go ahead.

Good evening. Thanks for taking the question. Just in terms of international on the strong growth that you saw there? Was there any particular geographic region that was driving the growth? Or was growth pretty strong across international markets? And then just in terms of the big bets, you talked about consumer finance a little bit, but just curious if you could frame of the P2P opportunity both in monetization and sort of the impact for the overall platform. Thank you.

Thanks Ralph, it's Sam Zales. On the international front, we don't break out country-by-country specifics, but I'd say to you that the countries we've been in the longest which are Canada and the U.K. are showing solid growth from a consumer and dealer perspective. So, you see the visitor growth and the session growth, but you also see the paid dealer acquisition growing tremendously. Langley has said this before on multiple occasions, if you are driving growth on the consumer side and driving a down funnel quality audience from a consumer perspective the return on investment and decisions for those dealers are pretty simple when they move from the free to the paid program. And we've been able to not only acquire through the freemium model dealers who get on the program and test it but then the move to the paid program because of the quality and quantity in the growth we're driving. So, as the fastest growing consumer audience in the automotive marketplace is in both Canada and the U.K., that's driving that growth you're seeing in those financial numbers. So each of those markets and even our new markets are taking up with the same perspective that we're bringing transparency to the consumers that they don't see from competitor models and dealers saying I want a player that can drive customer acquisition for me at a high-ROI. So that's been the basis of the growth.

Hi, Ralph. It's Jason. On P2P so I guess, I'd start by just taking the opportunity to reframe the -- or frame the market size again. Almost a third call it 25% of used cars in the country are sold peer to peer. So it's about 10 million cars. You know, if you think about the fees and the opportunity to make money on a car transaction at least at a dealership it's in the -- at a minimum several hundred dollars per. And the way that in P2P one can make money is consumers are willing to pay for the right -- or the ability to market their car and the convenience to market their car, and so on our sites and on other sites out there, consumers will pay anywhere from $50 to $150, $200 to market their car And then when you start to wrap services around that including an Escrow service and warranty and financing and potentially insurance and vehicle service contracts, you can get to easily a few hundred dollars of value that's created in each transaction. So there are 10 million cars that are sold peer to peer and there's call it $300, $400 of value per transaction, $3 billion to $4 billion market. What has us excited and there's -- what has us excited is that today, nobody has digitized that transaction at scale. And so it's still you hear us often say this is often done in a Dunkin' Donuts parking lot. And so right now, we're getting to the point where we're taking each of those elements of the transaction and moving them online, so that two people can transact both buyer and seller on their phone. And they can have a lot of the services that they're getting in the dealership today. And so we think we're going to make it -- we're making it much more seamless for the buyer and seller. We think over time people will start to think of us as not only a place to find a car to buy but also to sell their car and we think there's value to be created and money for us to make in providing a digitized version of the services.

That’s really helpful. Thanks, Jason. Thanks, Sam.

Our next question here is from Marvin Fong from BTIG. Please go ahead.

Oh! Thank you for taking my question. Just to follow on the Capital One relationship it's covering 10,000 dealers. You guys had 28000 total is there opportunity to grow the coverage from 10,000? Or do you feel like you've pretty much captured all of the relevant dealers? And then I have a follow-up.

So thanks Marvin its Jason. The 10,000 dealers is the sort of overlapping footprint of who Capital One work which dealers Capital One works with overlapping with which dealers we work with. They've tended to focus on franchise dealers which is a subset of the 28,000, it's about 16,000, 17,000 franchises. So they have a large share within franchise and 10,000 is the amount that overlaps. But, yes, longer term, we think there's absolutely an opportunity to get more dealer coverage, and provide consumers as we've said with the same sort of transparent financing solution that we give them with the car shopping solution. But Cap One is a great first partner for us that we view the 10,000 as very strong coverage in franchise.

Okay great. And I guess my follow-up is, at a higher level just stepping back I know you guys are doing so much with addressing P2P and consumer finance. But as we think about -- and you launched retargeting recently, are there any large or meaningful buckets of dealer spending digital advertising spending that you feel are still areas that you are still not addressing fully with a product? Or if you could just kind of rank order what's kind of left in that whatever $13 billion of dealer spending on digital advertising that you guys can still address? I'd appreciate some insight on that. Thank you.

Yeah. Hi it's Sam Zales. And I think you're asking a good question. Our aim is to be the customer acquisition channel of choice for dealers. And certainly with our listings and then our paid search or SEM Plus product our display advertising, and now audience retargeting products, we think we've got a big mix there to grow our AARSD over time and certainly drive a very, highly efficient customer acquisition for our dealer base. There are other areas that we look at and see from a dealer, digital marketing expense perspective. I think when you look at, social media, and you see that those channels becoming big ones for testing in all kinds of verticals, marketing spend and customer acquisition spend, we’re watching that and think that's interesting. We think online video and other formats for our customers to connect in to consumers is a great way to create customer acquisition and retention as well. So I think we've got a large swath of that digital marketing spend covered. We will not stop there as we launch those products and become successful penetrating the customer base with those and those next set of arenas we think are interesting as ones to look at if you look at that whole pie of spend. We're still moving significant dealers spend from off-line to online. So that's the big TAM opportunity right now that has floated the AARSD growth for us because we're driving such a down funnel audience from a trackable means as opposed to offline marketing that is moving away from the dealer's spend.

Okay, great. Thank you all. Thanks, Sam. Thanks, Jason.

Our next question is from Daniel Powell from Goldman Sachs. Please go ahead.

Thanks. Thanks for taking the question. I wanted to follow-up real quick if I can. On the relationship between AARSD growth and traffic growth, just wondering if you guys could give us a little bit more insight into how you think about or how we should think about, the growth that we're seeing in traffic versus the accelerating growth that you've been able to drive in AARSD? Anything that we should keep in mind in terms of the forward between what you're seeing on the traffic side and AARSD growth?

We have often tried to, I guess dispel the ability to have a tight linkage between those two for a couple of reasons and not to go too far into the weeds, but I'll give some examples. One is that average traffic growth does not reflect the traffic growth that an individual dealer has. And there is decent disparity among individual dealer, lead volume growth rates that create very different experiences for dealers as opposed to just an average audience growth of 24% or whatever the case may be. The second one is there's a timing element and so traffic growth -- significant traffic growth in Q4 of 2018 may not necessarily impact a dealer who signed up in Q3 of 2018 from a pricing standpoint because there oftentimes going to be locked into a subscription rate for a year. And then the third is that there definitely exists a phenomenon, which says that when our traffic grows very, very rapidly on a relative basis that we either choose not to or decide not to grow AARSD for that particular dealer as quickly as traffic growth does. We're trying to build long-term partnerships with dealers. And if they get to enjoy the benefit of some great traffic growth, we may take the long-term approach and say, we'll get paid for that down the road. We don't need to get paid for it today. So those are three examples as to why traffic and AARSD growth don't tie perfectly. And then you add into that the fact that AARSD is a composite of not only that, but also new products and also pricing and packaging changes, which exist. So I mean it's rare that they would be out of whack for a multiple quarter period. But they're also not going to travel in lockstep.

Thanks. That's really, really helpful. And then one last one. There's obviously a lot of focus on traffic during the quarter and you had mentioned that in March, you actually hit 40 million monthly unique. Just curious if you could just give us a sense of how traffic trended throughout the quarter? Or if there's anything that you're seeing quarter-to-date relative to that 40 million you hit in March?

This is Langley, Daniel. So we were pleased with the traffic growth across all the channels. I mean I think there was some – yeah, we spent a lot of time focused on brand growth, paid traffic growth, and organic growth. So we saw growth across all of those channels. I would say that I think one of the themes we saw in the public discussion was that there was -- I would argue kind of an inordinate amount of focus on organic traffic growth specifically Google. And I guess our only response to that is that over the last 12 years that I've been involved with this company, we've been through ups and downs and different Google algorithm changes and in the long haul we have benefited really by building a good product. We don't -- as a company we don't spend a ton of time, focused on how we optimize our site for a given search engine. And I would even argue that like five years ago it probably would have -- any given change in a Google organic -- algorithm change might have had a bigger effect on our company, but at this point given especially all the investment we've made in brand, organic traffic specific for any given search engine just isn't an enormous part of our business. So it isn't -- we've kind of grown up as a company to have a really varied number of sources of traffic. So it's really not -- we're not dependent on any one source of traffic.

Thanks, guys. Appreciate the detail.

Our next question is from Naved Khan from SunTrust. Please go ahead.

Yeah. Thanks a lot. Maybe just to piggyback on your answer Langley about the organic not being as important to the overall business. Can you maybe just give us some sense about the quality of the traffic as it compares to paid traffic? And how you can convert maybe more of the paid traffic into clickable leads downstream versus organic? And then I have a follow-up question.

I mean, as we've said in the past we don't really comment on any either breakout of traffic sources or even downstream convergence on some of those sources. I would say that, our – the work we do with both in terms of algorithmic traffic kind of SEM traffic acquisition we do in-house as well as our brand efforts there is an enormous amount of quantitative work we do to focus on the return on investment on all those channels. So, it's very mathematically based, it's very quantitative and it's done at very large scale. So I can assure you we're pretty maniacally focused on just that return on investment, but I can't really comment on the quality of organic versus paid channels.

Understood. And then the follow-up question I had was just around the add-on offerings that you've been launching over the last maybe four, five, six quarters SEM Plus retargeting delivery. Can you give us some sense of what the option levels are for maybe these offerings? I think display – I think at one point you disclosed it's less than 20%. What about these newer offerings?

Yes. Hi. It's Sam Zales. And thanks for the question. I don't think we're reporting on penetration rate. I think we qualified in the fourth quarter we were at 26% of customers adopting a second product with us which was up significantly year-over-year. That trend continues where we typically hear from dealers I love your audience both the quantity and quality, how do I get in front of more consumers that you can drive it to me and drive to my website which is a lot of what some of those products do. They allow us to move a consumer, who is looking at a competitive offering to other dealers in the marketplace and by providing their retargeting effort or the display or the paid search process you're driving that traffic to a noncompetitive situation at that dealer's website. Delivery has been a huge success because we're both benefiting consumers who don't have enough choice in their local search results. And dealers having an opportunity to get their inventory in front of more consumers and close more business. So all of those have – they're fairly recent to the market in some of those products, but I think having a broader toolset to dealers when they're looking to continue to grow their return on investment from customer acquisition channels, they're going to the player that provides the largest audience and the most down funnel shopping experience so that they can close new business with a high-ROI.

Pretty helpful. Thank you.

Our next question here is from Ron Josey from JMP Securities. Please go ahead.

Great. Thanks for taking the question. I just wanted to ask about AARSD growth and Jason you mentioned that the continued growth here and I think it's the third quarter 20%-plus growth. I constantly get the question of whether this is a pricing – whether pricing is going up on a like-for-like basis? Or AARSD is going up before traffic is – as traffic is growing. So can you just comment on where you're seeing just on that part of AARSD knowing there's lots of different components but just on the leads part what's driving the growth there. Is it traffic or maybe an increase? And then Sam just as a corollary and we know we got some questions just now about the different products you're offering just walk us through the sales process. Instead of a dealer coming to you how else can I --how are you all going to the dealer to sort of increase the retargeting SEM Plus awareness? Thank you.

I'll take them Ron. Sam Zales. On AARSD growth and I hope I'm answering your question. We've said there are three levers that drive AARSD growth. The biggest over the last period of time and as we look at it certainly with our success from an audience perspective is going to be connection growth. So Jason just described a situation in which there are some dealers who have a larger audience growth or connection growth in a particular one-year period and we may not even match that price point growth against the audience growth or the connection growth. But the largest growth over the last period of time and for the foreseeable future will be that driving connection growth will be the biggest driver of AARSD growth. The second bucket is product penetration and getting additional products into the mix of that dealer base so that they're paying more for their overall subscription, because they've adopted multiple products. I think we've had good success with the display product with the paid search product with the audience retargeting product. With delivery we've continued to open up the bucket and that is showing some nice growth for us and it's becoming an interesting part of that mix for AARSD. The third is a unit price economics and while we've said over the past that is one, we're going to be deliberate about. We're not going into dealers and saying we want to grow your unit price dramatically because we're also driving significant connection growth. That is a lever that we're seeing some progress on, because we are packaging our offerings in a way that does grow unit price. So, those second two levers are smaller, but they are showing real promise for us as we go forward. To the process we use -- and your good question of how we go to market -- and we are fortunate because we have the largest audience and an incredible down funnel quality shopper that dealers do come in-bound to ask about the next set of products. But our process in a really highly efficient inside sales organization is to target the customers that we think are most thoughtful about the digital marketing suite. So it's typically a larger more complex and more educated digital marketing organization, the larger franchises and larger independent dealers that are thinking about digital marketing and saying there are these other channels for which the CarGurus audience if I can target it, will be highly effective for me to get in front of. So, the display product, the audience retargeting product obviously the SEM Plus product is using the CarGurus expertise to target and through technology driving that down funnel shopper into the dealer base. So we do that through not talking to every customer about every product, but targeting the sales process to those dealers who are more likely to convert at an early stage and that's the success we've seen in penetrating the customers with multiple products sales.

Great. Thank you.

This concludes the question-and-answer session. I'd like to turn the floor back to management for any closing comments.

So I just want to thank everyone for their questions tonight. I look forward to -- because Rodney mentioned hopefully those of you that haven't registered for the Investor Conference will do so. We look forward to seeing you hopefully here in Boston soon. Good night everyone.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.