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Impairments | 9 Months Ended
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Sep. 30, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
Impairments | 6. Impairments Background During the three months ended June 30, 2025, the Company identified a triggering event requiring an interim impairment test at the CarOffer reporting unit due to the sustained low Transaction volume and a delay in the business’s expected return to growth. The Company performed an updated fair value analysis of the CarOffer reporting unit, which indicated an excess of carrying value over fair value of the CarOffer reporting unit and resulted in a full impairment of the remaining goodwill and a partial impairment of other long-lived assets within the CarOffer reporting unit. Prior to testing the goodwill and other long-lived assets included in the CarOffer reporting unit for impairment, the Company first evaluated current assets, inclusive of the cash and cash-equivalents, accounts receivable, inventory, prepaid expenses, and other current assets allocated to the CarOffer reporting unit, under applicable guidance and identified no impairment. The Company then evaluated other long-lived assets included in the CarOffer reporting unit under ASC 360, Property, Plant, and Equipment (“ASC 360”). Other long-lived assets were tested for impairment at the asset group level. The Company identified the asset group as the entire CarOffer reporting unit, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. As the CarOffer asset group did not pass the step one recoverability test on an undiscounted cash flow basis, the Company then compared the fair value of the asset group to its carrying value. To estimate the fair value of the asset group, the Company utilized an income-based valuation approach by means of a discounted cash flow method, based on market participant assumptions. The assumptions used to estimate the fair value using a discounted cash flow method included forecasted revenue and EBITDA, long-term expectations for growth rates and operating profit margin, expected needs for annual capital expenditure and net working capital, and a market-participant discount rate derived utilizing a capital asset pricing model. The excess of the carrying value of the asset group over the fair value was first allocated amongst the long-lived asset group (excluding goodwill), noting each individual long-lived asset within the group may not be impaired below its individual fair value. As discussed below, for the three months ended June 30, 2025, the Company recognized impairments of CarOffer right-of-use assets, capitalized hosting arrangements, capitalized internal-use software, and capitalized website development assets of $499, $291, $769, and $4,801, respectively, to reduce the assets carrying value to fair value. The Company also recognized impairments of the CarOffer brand intangible asset of $6,624 to reduce the carrying value to its fair value. All other long-lived assets’ carrying value were at or below fair value. Subsequent to performing the impairment assessment of its long-lived assets, the Company then assessed goodwill included in the CarOffer reporting unit, resulting in an impairment charge of $19,568 to reduce the carrying value of the CarOffer goodwill to a fair value of zero. See below for further details of each impairment charge. Accordingly, for the three months ended June 30, 2025, the Company recognized a $32,552 impairment to the CarOffer reporting unit in the Digital Wholesale segment. During the three months ended September 30, 2025, there was no additional impairment related to the CarOffer reporting unit. During the nine months ended September 30, 2025, the Company determined that there were no indicators of impairment for the U.S. Marketplace or U.K. Marketplace reporting units and therefore an interim impairment assessment was not performed for these reporting units. Right-of-Use Assets In connection with the three months ended June 30, 2025 triggering event discussed above, the Company assessed the right-of-use assets associated with CarOffer’s Addison, Texas lease for impairment. As noted above, the Company evaluated the fair value of the CarOffer asset group and subsequently allocated the resulting impairment charge to each of the long-lived assets in the asset group, including the CarOffer right-of-use assets. The Company estimated fair value using the discounted cash flow method, with key inputs including the selected market rental rates based upon similar office spaces, the discount rate, and other estimated replacement costs. Th e fair value measurement is categorized as Level 3 within the fair value hierarchy as there are significant unobservable inputs utilized in the valuation technique. During the three months ended June 30, 2025, a non-cash impairment charge of $499 was allocated to the right-of-use assets in the CarOffer asset group, which was recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements in the Digital Wholesale segment. Capitalized Hosting Arrangements, Capitalized Internal-Use Software, and Capitalized Website Development In connection with the three months ended June 30, 2025 triggering event discussed above, the Company assessed the capitalized hosting arrangements, capitalized internal-use software, and capitalized website development for impairment. The Company made the determination not to estimate fair value and instead to impair the entire balance of the capitalized hosting arrangements asset as it was not yet placed into service and will not be used. During the three months ended June 30, 2025, a non-cash impairment charge of $291 was allocated to the capitalized hosting arrangements in the CarOffer asset group, which was recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements in the Digital Wholesale segment. As noted above, the Company evaluated the fair value of the CarOffer asset group and subsequently allocated the resulting impairment charge to each of the long-lived assets in the asset group, including the CarOffer capitalized internal-use software and capitalized website development. The Company estimated fair value using the relief from royalty method, with key inputs including forecasted revenue, royalty rate, expected period of future reliance on the technology, and discount rate. The fair value measurement is categorized as Level 3 within the fair value hierarchy as there are significant unobservable inputs utilized in the valuation technique. During the three months ended June 30, 2025, a non-cash impairment charge of $769 was allocated to capitalized internal-use software costs in the CarOffer asset group, which was recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements in the Digital Wholesale segment. During the three months ended June 30, 2025, non-cash impairment charges of $2,919 and $1,882 were allocated to the capitalized website development costs in the CarOffer asset group, which were recognized within wholesale cost of revenue and impairment operating expense, respectively, in the Unaudited Condensed Consolidated Income Statements in the Digital Wholesale segment. Other Intangible Assets The Company determined that there were no indicators of impairment related to other intangible assets for the U.S. Marketplace or U.K. Marketplace reporting units and therefore an interim impairment assessment was not performed at June 30, 2025, for these reporting units. In connection with the three months ended June 30, 2025 triggering event discussed above, the Company evaluated the CarOffer brand intangible asset for impairment. The Company estimated fair value using market participant assumptions and the relief from royalty method, with key inputs including forecasted revenue, royalty rate, discount rate, and useful life. The fair value measurement is categorized as Level 3 within the fair value hierarchy as there are significant unobservable inputs utilized in the valuation technique. During the three months ended June 30, 2025, a non-cash impairment charge of $6,624 was allocated to the brand intangible asset for the CarOffer asset group, which was recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements in the Digital Wholesale segment. The impairment charge reduced the carrying amount for the brand intangible asset for the CarOffer reporting unit to its fair value. As of September 30, 2025 and December 31, 2024, intangible assets, exclusive of assets that have been retired, consisted of the following:
|  | As of September 30, 2025 |
|  | Weighted Average Remaining Useful Life (years) |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Brand |  |  | 3.7 |  |  | $ | 9,178 |  |  | $ | (5,685 | ) |  | $ | 3,493 |
Customer relationships |  |  | — |  |  |  | 1,870 |  |  |  | (1,870 | ) |  |  | — |
Developed technology |  |  | — |  |  |  | 1,565 |  |  |  | (1,565 | ) |  |  | — |
Total |  |  |  |  | $ | 12,613 |  |  | $ | (9,120 | ) |  | $ | 3,493 |
|  | As of December 31, 2024 |
|  | Weighted Average Remaining Useful Life (years) |  |  | Gross Carrying Amount (1) |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Brand |  |  | 6.1 |  |  | $ | 24,559 |  |  | $ | (12,792 | ) |  | $ | 11,767 |
Customer relationships |  |  | — |  |  |  | 19,870 |  |  |  | (19,870 | ) |  |  | — |
Developed technology |  |  | — |  |  |  | 64,565 |  |  |  | (64,565 | ) |  |  | — |
Total |  |  |  |  | $ | 108,994 |  |  | $ | (97,227 | ) |  | $ | 11,767 |
(1) During the year ended December 31, 2024, the Company recorded $7,538 of impairment charges for the brand intangible asset related to the CarOffer reporting unit in the Digital Wholesale segment and accordingly adjusted the gross carrying amount of the asset. For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, amortization of intangible assets was $813, $509, $1,830, and $3,148, respectively. For the three months ended September 30, 2025, there was no impairment for intangible assets. For the nine months ended September 30, 2025, the Company impaired $6,624 of Digital Wholesale segment intangible assets within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements. For the three months ended September 30, 2024, there was no impairment for intangible assets. For the nine months ended September 30, 2024, the Company impaired $7,538 of Digital Wholesale segment intangible assets within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements. As of September 30, 2025, estimated amortization expense of intangible assets for future periods is as follows:
Year Ending December 31, |  | Amortization Expense |
Remainder of 2025 |  | $ | 240 |
2026 |  |  | 959 |
2027 |  |  | 959 |
2028 |  |  | 959 |
2029 |  |  | 368 |
Thereafter |  |  | 8 |
Total |  | $ | 3,493 |
Goodwill In connection with the triggering event discussed above, the Company assessed the CarOffer reporting unit goodwill for impairment. The Company estimated the fair value of the CarOffer reporting unit using an income-based valuation approach by means of a discounted cash flow method. The assumptions used to estimate the fair value of the reporting unit included forecasted revenue and EBITDA, long-term expectations for growth rates and operating profit margin, expected needs for annual capital expenditure and net working capital, and a market-participant discount rate derived via the capital asset pricing model. As of June 30, 2025, the carrying value for the CarOffer reporting unit (after adjustments for other long-lived asset impairments discussed above) exceeded its fair value, resulting in a non-cash impairment charge of $19,568, which was recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements in the Digital Wholesale segment. The impairment charge reduced the carrying value of the CarOffer reporting unit goodwill to a fair value of zero. As of September 30, 2025, changes in the carrying value of goodwill were as follows:
|  | U.S. Marketplace |  |  | Digital Wholesale |  |  | Other |  |  | Total |
Balance as of December 31, 2024 |  | $ | 12,477 |  |  | $ | 19,568 |  |  | $ | 14,122 |  |  | $ | 46,167 |
Impairment of goodwill |  |  | — |  |  |  | (19,568 | ) |  |  | — |  |  |  | (19,568 | )
Foreign currency translation adjustment |  |  | — |  |  |  | — |  |  |  | 1,810 |  |  |  | 1,810 |
Balance as of September 30, 2025 |  | $ | 12,477 |  |  | $ | — |  |  | $ | 15,932 |  |  | $ | 28,409 |
As of September 30, 2025, the accumulated impairment losses of goodwill were $134,774. As of December 31, 2024, the accumulated impairment losses of goodwill were $115,206. Impairments Summary For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, impairments consisted of the following:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Cost of Revenue |  |  |  |  |  |  |  |  |  |  |  |
Capitalized website development |  | $ | — |  |  | $ | 9,750 |  |  | $ | 2,919 |  |  | $ | 9,930 |
Total impairments in cost of revenue |  | $ | — |  |  | $ | 9,750 |  |  | $ | 2,919 |  |  | $ | 9,930 |
Operating Expense |  |  |  |  |  |  |  |  |  |  |  |
Capitalized hosting arrangements |  | $ | — |  |  | $ | 974 |  |  | $ | 291 |  |  | $ | 974 |
Capitalized internal-use software |  |  | — |  |  |  | — |  |  |  | 769 |  |  |  | — |
Capitalized website development |  |  | — |  |  |  | 5,833 |  |  |  | 1,882 |  |  |  | 5,833 |
Intangible assets |  |  | — |  |  |  | — |  |  |  | 6,624 |  |  |  | 7,538 |
Goodwill |  |  | — |  |  |  | — |  |  |  | 19,568 |  |  |  | 115,206 |
Right-of-use assets |  |  | — |  |  |  | — |  |  |  | 499 |  |  |  | 4,731 |
Furniture and fixtures |  |  | — |  |  |  | 219 |  |  |  | — |  |  |  | 219 |
Total impairments in operating expense |  | $ | — |  |  | $ | 7,026 |  |  | $ | 29,633 |  |  | $ | 134,501 |
Total |  | $ | — |  |  | $ | 16,776 |  |  | $ | 32,552 |  |  | $ | 144,431 |

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- Definition The entire disclosure for the details of the charge against earnings resulting from the aggregate write down of all assets from their carrying value to their fair value. Disclosure may also include a description of the impaired asset and facts and circumstances leading to the impairment, amount of the impairment loss and where the loss is located in the income statement, method(s) for determining fair value, and the segment in which the impaired asset is reported. + References No definition available. + Details
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