Good day, and welcome to the CarGurus Fourth Quarter and Full Year 2022 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Kirndeep Singh, Vice President and Head of Investor Relations. Please go ahead.

Thank you, operator. Good afternoon. I'm delighted to welcome you to CarGurus’ fourth quarter and full year 2022 earnings call. We will be discussing the results announced in our press release issued today after the market close and posted on our Investor Relations website. With me on the call today are Jason Trevisan, Chief Executive Officer; and Sam Zales, President and Chief Operating Officer. During the call, we will make statements regarding our business that may be considered forward-looking within applicable securities laws, including statements concerning our outlook for the first quarter of 2023; management's expectations for our future financial and operational performance; our business and growth strategies; our expectations for our CarOffer business and acquisition synergies; the value proposition of our current product offerings and other product opportunities; the impact of the semiconductor chip shortage and other macro-level industry issues; and other statements regarding our plans, prospects and expectations. These statements are not promises or guarantees and are subject to risks and uncertainties which could cause them to differ materially from actual results. Information concerning those risks and uncertainties is available in our earnings press release distributed after market close today and in our most recent reports on Forms 10-K and 10-Q, which, along with our other SEC filings, can be found on the SEC's website and in the Investor Relations section of our website. We undertake no obligation to update or revise forward-looking statements, except as required by law. Further, during the course of our call today, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to comparable non-GAAP measures is included in our press release issued today as well as in our updated investor presentation, which can also be found on the Investor Relations section of our website. With that, I'll now turn it over to Jason.

Thank you, Kirndeep, and thanks to everyone joining us today. As I shared at the beginning of the year, following a transformative 2021, 2022 was a year of activation across our platform. With the theme of activation guiding our 2022 road map, we were able to bring more dealers on the foundational Listings business, launch and grow the dealer base utilizing Digital Deal and expand into new geographies with Instant Max Cash Offer. While we're extremely proud of these activations, dynamic changes in automotive market conditions caused us to experience challenges in the second half of the year that required us to recalibrate our goals and address CarOffer’s operational difficulties. Though we're pleased with the results of our efforts in tackling these challenges and are seeing some encouraging early signs of improvement, we still have work to do to ensure that our operations and products are built with scale and profitability in mind. Despite these short-term difficulties, we're well down the path of delivering on the vision of being the number one digital destination for both consumer and dealer customers to confidently buy and sell their vehicles with the best selection, price, convenience and trust. Our vision has remained steadfast, despite an evolving and volatile automotive market landscape. Throughout the past year, the automotive market still encountered challenges arising from the semiconductor chip shortage. However, in 2022, a reversal of two key factors brought us to an inflection point. New inventory increased, albeit below pre-pandemic levels and interest rates rose quickly, driving automotive lending rates to levels not seen since 2010, which curbed consumer demand and drove up days on lots. The concurrent impact of these factors contributed to a decline in used retail and wholesale car prices as well as a reduction in wholesale activity. Though it is encouraging…

[Operator Instructions] Our first question comes from the line of John Colantuoni with Jefferies.

I have two high-level questions. First, given your -- you've now had the opportunity to assess the Digital Wholesale performance in a favorable and unfavorable industry backdrop. What are the key areas where you sort of plan to pivot the long-term strategy to better optimize the product offering? I know you mentioned a lot of inspection network and revamping arbitration. Is there anything else that you'd point out? And second, turning back to the margin targets for each business that you provided at the Analyst Day. Can you just talk to whether those targets are still relevant? And if so, can you give us a framework for what needs to happen for those targets to materialize? Thanks.

Thanks, John. This is Jason Trevisan. I'll have Sam Zales to talk about the first one on digital wholesale, and then I can speak to your margin target question.

Thanks, Jason. And John, hi. Sam Zales here. Thanks for the question. I don't think there's a long-term change having seen CarOffer through the highs of the market and the incredible lows of the macro environment that we would change the product offering itself. We think there is a competitive advantage to the instant trade platform that allows dealers the most efficient way to get the best buying and selling opportunity in the market. What we're really focused on is operating the business much more efficiently and effectively. You've heard us go through the inspection process, which has been remarkably changed in advance to include now mechanical engine, frame damage, electrical -- inspections that we used to just do cosmetic, that wasn't good enough in a downturn of a market. We've improved our processes in arbitration, our re-matching process that added to extra costs, transportation legs that weren't paid for by customers. It's all about the operations that will improve this business and get it back to profitability and expand what we're doing. A couple of areas I'd point to when you speak to product features and how can we make ourselves continue to advance and innovate as we have with this platform. One is one that we're testing right now, which is called a with-a-look [ph] capability. It is early stage, just starting. But with a process that a dealer is buying sight unseen in a price declining market, we're giving dealers an opportunity to take more look at the features of the vehicle, the inspection report with photos, allowing them to see a little bit more of the purchase before they want to make and commit to that purchase. That's an important element of this process, we've improved in inspections to allow dealers to be sure they're right. So we've reduced that arbitration as we have over the last several months. But we think the biggest opportunity here with this innovative and differentiated platform is to put CarOffer and CarGurus together to create dealer opportunity to source, market and sell their vehicles in the best and most efficient way possible. We've talked about in their listings package, being able to see, I can sell a vehicle wholesale at the same price I might have tried for on a retail level, that's just unheard of in our marketplace to allow them to do that. And we think that putting the two platforms together creates that expanded capability that no other partner in the market can do.

Thanks, Sam. And then, John, on your second question on margin targets, and there might have been a second part to the second question. And if so, just remind me what that was when I'm done here. But yes, we still think that the long-term targets from our IR Day, hold. I think the ones to focus on our marketplace product and wholesale. And you can see from that slide that marketplace was already achieving the gross margin targets that we think are long term. They were at the high end of it. Product was close. Now granted, that was as you pointed out, when prices were rising, and it was a better environment. But given all of the operational improvements that you've heard us talk about, we still believe that those are the right long-term targets and same with wholesale as well. And what this doesn't contemplate is actually echo of what Sam just said, if and as we bring these pieces of the platform together, better over time and we think there are continued marketing synergies and other opportunities as well. But on a standalone sort of independent business line perspective, we think these margin targets are still our long-term goals.

Our next question comes from the line of Jed Kelly with Oppenheimer.

Just circling back to the Marketplace segment. I guess could you just assess the visibility in Marketplace going into '23 and just how we should think about the margins in that segment being back, I guess, to those ‘21 levels that you highlighted? And then, I guess for Sam, can you talk about how dealer engagement is progressing with CarOffer? I mean, is there any KPIs you can just share around more dealers using the product? Thank you.

Sure. Thanks, Jed. It's Jason. So on Marketplace for '23, we talked about, I think, in the script, that we continue to see growth into Q4 and into Q1 and from the subscription basis. There are some short-term headwinds on some of the revenue elements like OEM advertising is a good example. But we -- but the marketplace business will grow in '23. From an expense basis, we do have -- we've highlighted a couple of times that we have the rent of our new headquarters that is being built out, and that's not insignificant. So, that's low double-digit millions of additional rent, and we have grow over expenses from some of the hiring that we did in last year. But we have really strong visibility into our Marketplace business given the nature of it and the EBITDA -- and strong visibility into EBITDA as well. And the investments that we're making outside of rent, I would say, of the new building, the investments we're making are for new innovation around Digital Retail, Digital Deal and things that we're confident are going to drive revenue.

Jed, I'll jump in. It's Sam Zales here on CarOffer. Thanks for asking the questions. I think you've got to cloud your overall question on cohorts or engagement of dealers with the macro environment. All dealer wholesale transaction volume has been reduced over this period of time as prices declined dramatically in the wholesale arena, just transactions are low overall. So, I don't dissect that from the operational issues we've got, but I think that's going to put a cloud overall on transaction volume per dealer as we look at the whole market moving in that direction. What I'll say though is, we're making the explicit path right now to say, reduced volumes of transactions at CarOffer to create a higher and higher percentage of profitable good transactions. We're in a mode right now of saying fix the operations, make it profitable again, and then you can scale as fast as you want. That's our path right now. So, it's a little bit of a deliberate strategy there. When we use inspections to increase our fail rate, we're going to have fewer transactions going through, and that's okay because we're not going to let those arbitrated transactions go through. When we get tougher on dealers around the arbitration process and say that you can't take advantage of it in that process, they're going to do less transactions on the platform. On the consumer end and C2D, our Instant Max Cash Offer business, consumers aren't selling their vehicles as much as they were previously. Every player in the market is finding that. And so when they're not transacting as much, we're certainly going to stop them if they've got a vehicle that's not going to be healthy for a dealer to transact with, and we're going to lower those transactions as well. So, I think it's a combination of both the macro market and us explicitly and deliberately slowing down transactions, getting them to be profitable and a higher percentage of profitable transactions to then scale up again as we get through a couple of quarters of rebuild here.

Our next question comes from the line of Chris Pierce with Needham & Company.

I was just curious, you talked about 4Q dealer trends in the U.S. How responsive is that to changes in trend? Because 4, 6 months ago, dealers were sitting on overpriced inventory, but January and February retail sales came in, I think, better than expectations. So, I was just curious. And then you've got Digital Deal. And I'm just kind of curious how responsive that is to changes in trend in the overall market and the new products you're introducing?

Thanks, Chris. I don't think Sam or I caught the crux of the question, how responsive you said the other trends are to macro factors, like inventory levels, is that what you asked?

Not sure inventory levels, but I know that the second half of last year was a difficult time for a lot of dealers, specifically used dealers and you guys lost dealers quarter-over-quarter, but then January and February have been better from a retail sales perspective. So I'm just curious how real time are these decisions for dealers in terms of like dealer growth in '23, what that might look like if the market continues to be stronger?

Got it. Understood. The answer is it's mixed. You will see a couple of different and even conflicting reactions from dealers. So, when it's harder for -- well, if you go back a ways, when it's easier for dealers to sell cars, then some dealers will turn off different marketing partners in order to sort of “save money” and drop more to the bottom line because the cars are selling themselves, so to speak. Then in -- but then when cars are harder to sell, you will sometimes see some dealers say cars are harder to sell. I'm not sure if I'm going to sell that many, I better cut on expenses just to be safe. You have other dealers that say, I would argue the more long-term focused dealers who say, well, if cars going to be harder to sell, I better invest in marketing in order to keep my inventory turns at a pretty consistent pace over time. So, the dealers who -- maybe not surprisingly, who tend to be more reactive in the immediate moment in the real time, tend to be the smaller dealers that are operating more like entrepreneurs and less like bigger businesses who are running on budgets and forecasts. And so, you see that mix with us. What makes us have confidence is that with our ROI value proposition, that plays well in any environment. And I think increasingly, dealers are seeing that they believe and we have -- we believe, we're confident that we've always had a really strong ROI. But now as we are really improving the quality of our leads through things like Digital Deal, they're starting to also realize that quality is very important because many dealers remember, don't have the same size sales forces that they used to have. And so, they need to try to handle or manage or service a certain volume of leads with fewer people. And so, the higher the quality of the lead, the higher the conversion rate, the more they can handle with a smaller sales force.

Our next question comes from the line of Marvin Fong with BTIG.

Just thought I'd follow up a bit on IMCO. I appreciate that you guys have dialed back the marketing there and improving the operations. I'm just curious about the bidding prices between the sellers and buyers, I think you guys said in prior quarters, but that also kind of needed a readjustment for sellers to kind of realize that car prices have come down, that sort of thing. And of course, the rental agencies are no longer those aggressive bidders. So just curious if you could kind of shed some light on how -- are the prices getting narrower between sellers and buyers? And then, I have a follow-up.

Hey Marvin, it's Sam Zales. Thanks very much. I think they're -- yes, they're getting narrower in the definition you're using. I think the real situation right now is that consumers for the first six months of 2022 had incredible market opportunity to sell their vehicles at the highest prices they've ever been from a wholesale perspective. And I think any time in that environment, we had aggressive buyers in there, and we had a significant transaction volume because dealers were willing to pay anything in a rising tide environment to do so. I think the macro environment is just telling you consumers may be thinking they could go back to what their vehicle was worth six months ago, and it's not worth that today. The consumer demand for purchasing vehicles is down. So dealers are depressed in their bid prices right now on the program. So, I don't think we're any less competitive. We're really just following the market trends right now, consumers hanging on to their vehicles and not selling as much and the bids lower because there isn't as much demand for buying vehicles at the retail area right now with interest rates and other things, and it's leaving us with less volume. I think you'll also see that we're being smart in saying with all these changes we've made operationally. The reduction in marketing expense when we know we're failing more vehicles with our inspections, we're being tighter on our processes and our data. We're just going to be careful about how aggressive we're going into that market. So, we're starting to see pricing sort of lift a little bit in the new year, but I think it's too early to tell whether we're on another upswing again. And if we are, I think you'll see more of that balance in the buy-sell price and consumers will get more aggressive, and we'll have more bids that will work on that front as we go forward.

Okay, great. And then a question just about the dealer adds for the quarter and maybe what you're thinking about for this coming quarter. So, was the decline concentrated perhaps in independent to smaller dealers, or was it just kind of across the board? I think someone else in your space has suggested that independents are under particular pressure this quarter. But -- and then secondly, what are your -- what's embedded in your guidance, or how are you thinking about the dealer count in terms of your guidance for the first quarter? Thanks.

Thanks, Marvin. I think what you saw in fourth quarter, a small decline was really based on a couple of factors. One is seasonality. Every year that I've been in the business for eight years November, December is that time, Jason just talked about that the more -- we didn't see anything in a differentiation but by one segment or another. But any dealer is going to get more cautious on their budgets as they come into the new year and finish up the year to maximize their profitability. So, that's the typical time in any market scenario that we have seen a churn hit in that time period. We also reinitiated our annual business review. So you'll know by following the Company over the last number of years, coming out of 2020 into 2021 and even through most of 2022, we were very deliberate and careful about reinitiating an annual business review, which says to a dealer you're receiving X in quantity of leads and an ROI that we expect should be Y therefore your price point should move to Z or you can move to one of these new packages that's most valuable to you. And as we got more aggressive then you'll see us continue to move going forward with this strategy of saying we have to take our fair value out of the ROI equation with our partners is we involuntarily said if some dealers can't accept that price increase, we're going to move forward and turn that lead volume over to another dealer who will and will pay for that performance. So, I think both of those factors are really a process that will sort of define the fourth quarter. And I don't think we're sharing any details on first quarter, but we have confidence in where we're going from here.

And I would just add that especially because of the annual business review process that has sort of reignited a bit here, while we look at dealer count and we look at QARSD and those are helpful ways to model the business, we really focus on net new MRR. And dealer count often falls out of that. It's not always linear, but it tends to track. But in an ABR environment where we are holding a little firmer on price than we have sometimes in the past, you may very well find that we can end up with better net new MRR, better revenue growth and not as strong a dealer count, and we're okay with them, that the trade-off will take.

Yes, that makes total sense. I appreciate the color, both of you.

Our next question comes from the line of Brad Erickson with RBC Capital Markets.

Just a quick question. It sounded like arbitration got a little bit better in the quarter. Is that some potential TAM unlock for you guys as per unit arbitration costs come down, you can start to access potentially…

Sorry to interrupt. We've not been able to hear your question so far. Can you repeat it? Thanks.

Sorry. Can you hear me?

That seems a little better.

Okay. Sorry. As I was saying, it sounds like per car arbitration has gotten a little bit better in the quarter and you guys are making some improvements there. Do you guys view that as a potential TAM unlock of being able to deal in different types of cars or potentially lower ASP cars that you guys typically deal with? Is there any sort of TAM unlock from lower arbitration costs? And then I have another follow-up.

It's Sam Zales. I appreciate the question. I think we'll be careful in that direction. We've seen the incredible uptick of the CarOffer business. And with the macro environment hitting us knowing we needed to double down, triple down, quadruple down on the operating effort, yes. We're seeing arbitration rates move in the right direction. We're very pleased with that. We have more work to be done. As we said, this is a multi-quarter activity for us to really improve upon. That will make us more confident that we will have more and more profitable transactions in this business and get ourselves back to profitability. But we're going to stay in the realm where we have in the past of the hopefully, a larger percentage of later model year, lower mileage vehicles. Obviously, with the market going down, our average selling price was down to about $25,000 on the D2D business, 72,000 or so on the C2D business. We're not purposely going to go down to the low end of the market. But I do appreciate your question, which is with these inspections at a much more fine level and you talk about mechanical and engine and frame damage and electrical, you have the ability to look at vehicles and be certain that you're sending the right ones through with that lower arbitration rate. So, we could go and expand the TAM. I think our effort will not be deliberately to look down market right off the bat and say, let's head down that direction. We prefer to focus where we are on improving and beating our projections to where we have much more efficient and profitable operation.

Got you. That's super helpful. And then just one quick one on Marketplace. Kind of your -- I know you talked about the CarOffer marketing spend. But what's your philosophy on marketing expense in the Marketplace business in the event of a higher growth scenario than what you're currently baking in?

In the event of a higher growth scenario you said, how should we think about -- how would we think about marketing?

Yes, exactly. Like would you reinvest those dollars into marketing to capture the growth upside, or would you let this fall to the bottom?

Yes, I think that -- so there's no rigid formula. And I think we need to -- in a case where our growth is exceeding our expectations, considering to invest in marketing more is certainly a possibility. It's always a consideration as we think about capital allocation. What we have been challenged with, in the past, and I'm now going back several years is if -- when we have reinvested in marketing and that has generated more lead growth and more value growth to dealers, we've not always been able to monetize that as quickly. And so, we're very cognizant of that. This year, there is also an added dimension, which is our new brand campaign that we're very excited about. Our brand campaign we believe can really open up awareness and top of funnel for sort of overall audience growth in ways that we maybe haven't been able to in the past. And so, we're watching -- we're very excited about it. We're watching it closely. That's not as immediate a read as performance marketing. But as we see how that performs this year, we will decide if we should increase that as well. So the short answer is, yes, it's definitely consideration, but that it also is a trade-off with not just dropping it to the bottom line, but also investing in other things like product and Digital Retail and other areas of innovation for us.

Our next question comes from the line of Doug Arthur with Huber Research.

Yes. Just a quick one. Jason, the reference you made, obviously two transactions being down 75%, and that's going to become a more important metric. What is the exact definition of transactions? If you could just refine that a little bit.

Sure. It's what we call net cars moved, which is when there is a -- when a car is -- has been sold and the sale is complete, and it's based at the VIN level. And so, we look at it once the vehicle has been -- think of it as fully sold at the unique in VIN basis.

And does that crossover between IMCO and CarOffer, is that strictly IMCO?

No, it's IMCO -- it's both. It's what we think of as wholesale, which is both dealer-to-dealer wholesale as well as Instant Cash Offer. But it's not related to listings in any way or means.

Our next question comes from the line of Nick Jones with JMP Securities.

I guess the first one, on engagement metrics, I know you're focused on getting kind of higher-quality leads. How should we think about where these engagement metrics will trend kind of over time and maybe where they kind of bottom out and stabilize and maybe return to growth as you refine your focus on leads? And then I have a follow-up on the arbitration.

There's not really a moment or a quality threshold that once we've hit it, we're then going to go back to volume. I mean, the way -- and it's always going to be a mix. So, you probably heard these numbers or these data points. But just to put it in perspective, if we're sending a dealer 1,000 leads a month and they sign up for Digital Deal and all of a sudden, 150 of those leads converted multiples and another 100 of those converted to even higher multiples, that dealer is going to be thrilled. And what we look at is total cars sold estimated. We look at various forms of attribution to determine. And so, we have a proxy for all of our dealers about the number of cars we help them sell in a given month, and we watch that closely, and we're trying to grow that. And so the formula or the recipe for how we get to that is a combination of some growth, some quality improvement. But ultimately, it's distilling down to gross profit maximization at the dealership. Now, there's going to be a point at which -- sorry, just to close it out. There's a point at which we will never be -- we're never going to get 100% of our users through Digital Deal in the next year. And so, at some point, we have to acknowledge that there's sort of some natural self selection among users. And in which case, if we feel that we're reaching that local maximum, then we would resort back to growth within the different segments.

Got it. And then actually, I'm going to follow up on that then, and I can ask the arbitration one offline. I mean, so I guess what's the balance of kind of having this rich upper funnel content at CarGurus and making sure people kind of keep coming to research cars, maybe aren't as high quality leads, but they still like to engage with the brand from a content perspective. So, it seems like there's kind of two problems to solve. There’s one being kind of a top of mind brand that people can utilize and you can get that traffic cheaply and then kind of making sure you're only kind of paying for the high-quality leads. Does that question make sense?

Yes, I think so. And it's a multipronged approach that is from a marketing perspective, that's precisely the balance of brand and performance marketing. The brand is to create the awareness and the interest and the intent. And the performance marketing is to capture them when they're much closer to ready to buy from the marketing side. And then there's the product side. And the on-site merchandising side, which is giving that user a better experience when they're on our site that is more germane to more personalized to what they're looking to do, but also gives them the awareness and the opportunities to go into these other channels or click pads that turn them into much higher converting users. So, it's marketing plus product. And we have we think an extraordinarily long way -- long and exciting way to go. Because if you look at the percent of users on our site today, for instance, who are going through Digital Deal and who are 2 or 3 times more likely to convert, it's very small. I mean it's gone from zero to what it is. So we're excited about the growth, but the runway is just significant.

Our next question comes from the line of Tom White with D.A. Davidson.

This is Wyatt Swanson on for Tom. Thanks for taking our questions. My first question, I'm just kind of trying to dig deeper into marketplace subscription renewals here. Curious what approach you guys are kind of taking to renewals and volume-based pricing adjustments for your listings product this year. It seems like you paused a lot of that over the past couple of years. What's your appetite for trying to reset your pricing with dealers this year? And what's contemplated in your 2023 outlook on that front?

Thanks, Wyatt. It's Sam Zales here. We are deliberately restarting a process, but it's a different kind of process, one in which we do an annual business review with our partners. And so, it's less of a sort of a very transactional old way of doing things, which was we call you and say that your lead growth was up 20%. Your price point went up ex Take it or leave it at the end of the month. We're actually in a cycle of conversations about programs and consultation and what's working well, unique and proprietary data that that dealer could use and helping them see the value of our programs. And what we're doing in that regard is offering them a set of packages, all of which will impact our QARSD, obviously, I think that's the right way to do things. But to give them the opportunity to buy their way into higher-value programs. And if not, put them into a program where they may see less volume or less activity and then give that opportunity for next dealer to take their slot at a higher value program. So, we've developed these new packages and it allows us to get that flexibility to grow QARSD and help our dealers see the value and if they're willing to pay for performance go there. We're doing this in our early stage in December and have added capabilities. We've got a product called Lead AI, we call. It's one that allows dealers to focus on the most engaged shoppers on their platform and hit those first, so helping dealers convert more of their consumers coming in to close sales. And so by doing so, we're finding more and more features and capabilities to drive the dealers into upper level and higher paying premium packages. We've always had great success with our featured sponsored listings. And so that's an opportunity, again, for dealers to take advantage of getting to the top slots and paying more. So, we're doing this more deliberately. We'll be more aggressive as we head into 2023. And we're also selling new customers at a higher price point. Now that's something that's been important to our overall effort in the marketplace business. If we know, as Jason said, we have the highest ROI program in the market, and now we're adding Digital Deal to that. We have the opportunity to raise Digital Deal pricing, which we've done in 2023. And so, these are opportunities where we are going to be more aggressive, to your question on strategy, going forward.

Our next question comes from the line of Ron Josey with Citi.

Maybe two quick ones. And Sam, this is more of a follow-up on what you were just asked and talking about with Digital Deals. Now that we're pricing, call it, more in line with greater conversion rates, are you -- talk about just the go-to-market strategy on Digital Deals. In other words, are these included in those packages for renewals or Digital Deals front and center? How are you thinking about marketing them specifically now that we do have firm conversion rates and more insights on pricing would be helpful. And then Jason, just on process here, any update on CFO progress would be helpful. Thanks, guys.

Thanks, Ron. You're asking a great go-to-market question Digital Deal. We're really proud of those results. We mentioned in the opening remarks of 2 times and 3 times and even more close rates and for our dealers that we're seeing the results within using IHS data to get us there. That will compel us to be more aggressive. We're selling it on a standalone basis in some respects. So you go to a dealer and you say, you have an opportunity as Jason just said, to get X percent of your leads now closing at a much higher rate or already at a market high. Here's the price point. So we've raised that price point from what was and $250 and $200 depending on the market segment and inventory size to $500, $400, $300, a much higher price point on their way in. We're more aggressive and more committed to that as we go forward. We are packaging the Digital Deal program with Area Boost, which is now a product that you know helps dealers market their inventory outside of their local market. So, think of it as a value proposition that says to the dealer, you have an ability not only to find that consumer is willing to travel and look for a vehicle or have it delivered. If they prefer it that way, we're now adding Digital Deal there, so we're going to have that consumer further through the funnel, doing their financing, maybe putting a deposit down and knowing what their F&I products they want are into that mix. It just brings a much further down funnel shopper who you can sell, as Jason said, with fewer sales resources in the Company. So that package becomes more premium rich package. And then going forward, you will hear more from us in 2023 on packaging it, Digital Deal and even our highest premium packages to maximize our overall revenue and QARSD in the business. So you're right on the Digital Deal product proving itself in the market and then we have to take advantage of it on a commercialization basis.

And then, yes, thanks. On the CFO search, Ron, so we have been in the market with the search firm for about five months. When you're bringing in exec from the outside, these things take time, and we're maintaining a very high bar, as you would expect and want us to do. And so, we're seeing good candidate flow. We have candidates that are in multiple rounds at this point. And I'm -- it's one of my highest priorities at the moment. And so, I'm confident that between certainly myself, but also the exact team and to a lesser extent, the Board is giving it to do attention, and we're certainly excited with some of the candidates that we have in the background.

Thank you. This concludes our question-and-answer session. I'd like to turn the call back to management for closing remarks.

Thank you. So this is Jason. Thank you very much, everyone, for your interest. As you can tell from our remarks and hopefully, our Q&A, we're very excited about the strength of our core business, about the lead quality that's driving value to our dealers and helping them grow the value of their dealerships. Our new brand is launched, which is helping to grow the awareness among consumers and help them understand all that we're now able to offer them that much of which is relatively new. We're encouraged by the progress we're making at CarOffer, and we're really excited about the innovation in Digital Deal and Digital Retail more broadly. So there's a lot happening, and the market is -- the auto market is seeming to stabilize a bit, which is encouraging. So, we're very excited for 2023 and very proud of 2022. So, thank you, everyone. We appreciate your interest.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great night.