CarGurus (CARG)

Gross profit margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Gross profit	US$ in thousands	651,454	657,553	657,358	508,745	552,616
Revenue	US$ in thousands	916,367	1,656,550	951,443	551,428	589,606
Gross profit margin		71.09%	39.69%	69.09%	92.26%	93.73%

December 31, 2023 calculation

Gross profit margin = Gross profit ÷ Revenue
= $651,454K ÷ $916,367K
= 71.09%

Based on the data provided, CarGurus Inc has experienced fluctuations in its gross profit margin over the past five years. In 2019 and 2020, the company achieved exceptionally high gross profit margins of 93.84% and 92.26% respectively, indicating efficient cost management and effective pricing strategies. However, in 2021, the gross profit margin decreased significantly to 69.10%, suggesting potential challenges or changes in the company's operations.

The gross profit margin rebounded in 2022 to 39.73%, although still lower compared to the earlier years. This dip could be attributed to various factors such as changes in revenue mix, cost structures, or competitive pressures. Interestingly, in 2023, the gross profit margin improved substantially to 71.26%, showing a positive trend towards recovering and potentially improving profitability.

Analyzing the gross profit margin trend over the five-year period provides insights into CarGurus Inc's ability to generate profits from its core operations. It is essential for the company to continuously monitor and manage its cost of goods sold to ensure sustainable profitability and competitive positioning in the market.