Segment and Geographic Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment and Geographic Information

13. Segment and Geographic Information

Effective the first quarter of 2022, the Company revised its segment reporting from two reportable segments, United States and International, to one reportable segment. The Company concluded the change in segment reporting was not a triggering event for goodwill impairment. The change in segment reporting was made to align with changes made in the manner the Company's chief operating decision maker (the “CODM”) reviews the Company’s operating results in assessing performance and allocating resources. The Company’s Chief Executive Officer is the CODM.

Effective the first quarter of 2022, the CODM assessed the Company's performance on a consolidated basis rather than by geographical location as a result of the international segment becoming less significant relative to the overall business. The CODM reviews revenue and operating income as a proxy for the operating performance of the Company’s operations.

Effective the fourth quarter of 2022, the Company revised its segment reporting from one reportable segment to two reportable segments, U.S. Marketplace and Digital Wholesale. The change in segment reporting was a triggering event for an evaluation of goodwill impairment. As such, the Company evaluated for goodwill impairment on December 31, 2022 and did not identify any impairment to its goodwill. The change in segment reporting was made to align with financial reporting results regularly provided to the Company's CODM to assess the business. The CODM reviews segment revenue and segment income (loss) from operations as a proxy for the performance of the Company’s operations.

The U.S. Marketplace segment derives revenues from marketplace services from customers within the United States. The Digital Wholesale segment derives revenues from Dealer-to-Dealer and IMCO services and products which are sold on the CarOffer platform. The Company also has two operating segments which are individually immaterial and therefore aggregated into the Other category to reconcile reportable segments to the consolidated income statements. The Other category derives revenues from marketplace services from customers outside of the United States.

Revenue and costs discretely incurred by reportable segments, including depreciation and amortization, are included in the calculation of reportable income (loss) from operations. Digital Wholesale segment income (loss) from operations does not reflect certain IMCO related capitalized website development amortization incurred by the U.S. Marketplace segment. Digital Wholesale segment income (loss) from operations does reflect certain IMCO marketing and lead generation fees allocated from the U.S. Marketplace segment. Asset information by reportable segment is not provided to the CODM as asset information is assessed and reviewed on a consolidated basis.

For the years December 31, 2022, 2021, and 2020, segment revenue, segment income (loss) from operations and segment depreciation and amortization are as follows:

	Year Ended December 31,
	2022		2021		2020
Segment Revenue
U.S. Marketplace	$	614,136	$	594,602	$	519,835
Digital Wholesale		996,264		314,431		—
Other		44,635		42,340		31,616
Total	$	1,655,035	$	951,373	$	551,451

	Year Ended December 31,
	2022			2021			2020
Segment Income (Loss) from Operations:
U.S. Marketplace	$	125,796		$	151,343		$	120,836
Digital Wholesale		(9,174	)		7,189			—
Other		(8,144	)		(10,264	)		(23,080	)
Total	$	108,478		$	148,268		$	97,756

	Year Ended December 31,
	2022		2021		2020
Segment Depreciation and Amortization:
U.S. Marketplace	$	14,214	$	11,313	$	9,456
Digital Wholesale		30,690		28,394		—
Other		430		769		1,886
Total	$	45,334	$	40,476	$	11,342

For the years December 31, 2022, 2021, and 2020, a reconciliation between segment income from operations to consolidated income before income taxes is as follows:

	Year Ended December 31,
	2022		2021		2020
Total segment income from operations	$	108,478	$	148,268	$	97,756
Other income, net		2,884		1,092		1,354
Consolidated income before income taxes	$	111,362	$	149,360	$	99,110

As of December 31, 2022, 2021, and 2020, segment assets are as follows:

	Year Ended December 31,
	2022		2021		2020
Segment Assets:
U.S. Marketplace	$	531,118	$	453,837	$	470,286
Digital Wholesale		352,274		442,216		—
Other		43,710		35,521		32,012
Total	$	927,102	$	931,574	$	502,298

For the years ended December 31, 2022, 2021, and 2020, revenue by geographical region is as follows:

	Year Ended December 31,
	2022		2021		2020
Revenue by Geographic Region:
United States	$	1,610,400	$	909,033	$	519,835
International		44,635		42,340		31,616
Total	$	1,655,035	$	951,373	$	551,451

As of December 31, 2022, 2021, and 2020, long-lived assets outside of the United States were immaterial.