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Sonia Jain

Thank you, Alex. Our 2024 performance reflects our ability to deliver sustained profitable growth through focused execution in this dynamic operating environment. We ended the year with fourth-quarter revenue of $180.4 million, a new quarterly record powered by OEM and national growth of 15% year over year. Around half of our OEM partners increase their spending year over year, and five partners reached their highest ever fourth-quarter spend, and we believe there is still opportunity for continued growth.
OEM demand for our marketing and advertising products strengthened each month in Q4, and as Alex mentioned earlier, this momentum has translated into meaningfully higher 2025 upfront.
While dealer revenue was robust, it was down slightly year over year in the fourth quarter. We continued to experience some pressure on dealer advertising revenue while our solutions performed well.
AccuTrade sales were particularly strong throughout the quarter, and December was the second highest month of AccuTrade net launches for the year. Marketplace performance was affected by some expected seasonal softness, with slightly elevated churn and fewer upgrades in Q4 weighing on both dealer accounts and ARPD. We are closely monitoring these trends and see leading indicators in January that better reflect our marketplace value delivery. The strong consumer metrics that Alex previously mentioned give us confidence in our ability to grow marketplace in 2025.
Moving to operating expenses, fourth-quarter expenses were $161 million compared to $165 million a year ago, down over 2% year over year, primarily from lower marketing and sales spends. Fourth-quarter adjusted operating expenses were $150 million, roughly flat to the same period a year ago. Product and technology expenditures increased $4 million year over year on both a reported and adjusted basis. The majority of this increase supported compensation for new technical talents, enhanced investment in information security and infrastructure, and additional backend software.
Marketing and sales costs decreased $5 million year over year on both a reported and adjusted basis, reflecting continuous improvements in marketing efficiency that allow us to maintain brand leadership even with reduced paid marketing investments.
General and administrative expense was $2 million lower year over year on a reported basis and up slightly on an adjusted basis. As a reminder, G&A includes $2.6 million of the D2C earnout, which is deemed compensation expense under GAAP and therefore including reported operating expenses.
Net income for the fourth quarter was $17 million or $0.26 per diluted share compared to $8 million or $0.12 per diluted share in last year's fourth quarter, with an increase primarily attributable to the gain on sale of RepairPal in November. Adjusted net income for the fourth quarter was $33 million or $0.49 per diluted share, substantially similar year over year.
Turning to adjusted EBITDA, our fourth-quarter results of $55 million was up slightly year over year. Adjusted EBITDA margin of 30.8% in the fourth quarter was consistent with the prior-year period due to strong cost discipline to preserve profitability despite softer-than-expected growth in the fourth quarter.
On the key metrics. Dealer counts of 19,206 dealer customers was down 49 dealers quarter over quarter, as expected, given seasonally slower dealer spend late in the fourth quarter. While we are optimistic for dealer growth in Q1, particularly given the strong pipeline of prospects that we built at NADA and are now actively closing, we may experience some pressure from targeted rate increases implemented at year end, which will elevate churn in the near term.
In addition, we expect DealerClub to widen our sales funnel and attract new customers to our platform. Wholesale is an integral part of dealership operations, and we expect our transparent reputation-based approach to buying and selling vehicles will be compelling for dealers who seek a superior alternative to current opaque and expensive processes.
Our goal is to efficiently scale DealerClub by leveraging existing sales resources while investing in integrating our front-end and back-end systems. As such, we're prudently not factoring in a steep DealerClub revenue grant in 2025 at this time. However, we are pushing hard to sign up dealers with initial focus in the Southeast region, and we'll keep providing updates in future calls.
Switching to ARPD, fourth-quarter ARPD of $2,475 was effectively flat quarter over quarter. ARPD was down $48 year over year, reflecting the aforementioned lower customer accounts and less upgrade activity in the quarter. We believe we can return to ARPD expansion in the year ahead with multiple initiatives underway across the breadth of our business to package more value into our marketplace, dealer websites, and media subscriptions.
The wave of AccuTrade endorsements that we want in Q4 also opens up meaningful opportunities to drive further product adoption. Approximately 35% of our customer base is affiliated with OEM, who have endorsed our trade and appraisal technology, providing us with a robust sales pathway.
And finally, new dealers acquired through DealerClub will also be funneled into our cross-selling opportunities, especially for complementary solutions like Marketplace and AccuTrade, providing yet another lever for ARPD growth.
Now shifting to our balance sheet. Net cash provided by operating activities totaled $153 million for the year. Free cash flow was $128 million for the same period, the highest level since 2018, and roughly $12 million higher year over year. Free cash flow increased primarily from adjusted EBITDA growth of $15 million year over year.
During the fourth quarter, we purchased approximately 800,000 shares for $13.5 million and achieved our commitment to return approximately 50% of second half cash flow to shareholders via share repurchase. In 2024, we repurchased 2.8 million shares for $49 million. I'm also pleased to announce a new share repurchase authorization of $250 million over a three-year term, which refreshes and increases our prior $200 million authorization.
Returning capital to shareholders remains a capital allocation priority, and we are targeting share repurchases totaling $60 million to $70 million for 2025.
In terms of our liquidity and leverage, we repaid $30 million of debt for the full year, reducing total debt outstanding to $460 million as of December 31, 2024. Our total net leverage remains at 2 times, the low end of our target range of 2 times to 2.5 times. Total liquidity increased to $341 million as of December 31, 2024, providing ample resources to fund our growth strategy and create sustainable value for shareholders.
Now I'll conclude with first-quarter and full year 2025 guidance. For the first quarter, we expect to deliver revenue between $178 million and $181 million. Recall that dealer revenue expectations are premised on our fourth-quarter exit rate, which was slightly down year over year, and that our most significant repackaging work for 2025 is slated for mid-year.
OEM and national revenue is expected to continue growing on a year-over-year basis based on sustained demand for our marketing and advertising solutions. Based on quarter to date performance, we expect Q1 revenue to be consistent with the prior-year period.
For the full year, we anticipate revenue of $745 million to $755 million driven by growth initiatives related to product adoption, the aforementioned repackaging work, and new launches, including DealerClub. I also want to note that several of these initiatives, while ongoing, are also more likely to be back half weighted, and as such, we anticipate first half growth to be roughly 1.5% to 2% year over year.
Adjusted EBITDA margin for the first quarter of 2025 is expected to be between 25.5% and 27%, down slightly year over year and reflecting our revenue guidance and investment in DealerClub as we look to quickly integrate the business into our platform. Adjusted EBITDA margin outlook for fiscal 2025 is between 29% to 31%, or adjusted EBITDA growth of 7% year over year when taking the midpoint of the range. We expect improvements in sales velocity coupled with sustained cost discipline will continue to deliver strong operating leverage.
We are well positioned to drive accelerated organic growth, expand adjusted EBITDA margins, and thoughtfully return capital to shareholders as we execute on our platform strategy. We look forward to updating you on our progress as we push our industry forward.
And with that, I'd like to open the call for Q&A. Operator?

Question and Answer Session

Operator

(Operator Instructions) Tom White, D.A. Davidson.

Tom White

Two, if I could. I guess, on the full year revenue guidance, so I think the midpoint is like a 4% growth. Can you maybe just talk a little bit about what your kind of implied expectations or what that reflects about marketplace growth in '25 or maybe just kind of total dealer revenues?
And then in terms of DealerClub impact, I heard a couple of different things. I thought you said that there -- in the beginning, maybe the prepared remarks, that there wasn't going to be a contribution kind of baked into the outlook, but then it sounded like maybe there is just -- what's the impact from DealerClub?
And then I just have one follow-up on the quarter. Thanks.

Sonia Jain

Thanks for the question, Tom. So I think regarding full year revenue growth, we're expecting roughly two-thirds of our incremental growth in 2025 to come from dealer revenue. It will be a combination of marketplace as well as our upsells, including websites, AccuTrade, and media products. Obviously, as you can imagine, we have a huge opportunity to continue to push cross-selling opportunities given the already large installed marketplace base.
But we would expect, again, two-thirds of the revenue growth to be coming from marketplace and as you probably took away from our guidance, it is a little bit back half weighted for 2025 given the timing of initiatives and the time it takes for those to ramp into like a fully quarterized annualized number.

Tom White

Okay, and then just -- and I'm sorry, was there any presumed kind of DealerClub contribution there?

Sonia Jain

Oh, sorry, I didn't mean to forget that question. So on DealerClub, we're focused right now on really getting the business integrated. As mentioned, we're actively targeting a handful of regions to really drive depth and take with dealers.
Our launch at NADA, our announcement at NADA was really well received, so we feel really optimistic about the business. But to your point, no, we have not baked in a ton of revenue at this point in time just as we focus on getting the business going.

Tom White

Okay, understood. And then just on the quarter itself, I was hoping you could just unpack a little bit kind of what happened to dealer revenues. If I remember from your last earnings call, I think you talked about like October, you're seeing kind of month-over-month dealer editions kind of across all product lines.
So just trying to kind of understand what happened as the quarter progressed and I don't know, maybe it was something in kind of media solutions. Maybe just explain if it was sort of core listings, softness or other parts of what's in dealer revenue? Thanks.

Alex Vetter

Yeah, we typically do see seasonal softness in Q4 and as inventory levels normalized and dealers started to see profit compression on gross profit, there's always a natural pullback. So we did see a lot of our media solutions get pulled back in the fourth quarter, which has a little impact obviously on Q1 because of our Q4 exit rate. But we've seen this cycle before and now that inventory levels are back up on dealer lots, there is a return and we're seeing good momentum in the first quarter, just like we've seen in prior cycles.

Tom White

Okay, thanks. I'll get back in the queue.

Operator

Naved Khan, B. Riley Securities.

Naved Khan

Great, thank you very much. I have two questions. One on active trade, customer account growth, so you added 15 net for the quarter. It seems like December was a strong month, but just talk about maybe the retention in the base that you are seeing and how much of that is going to be contributed to growth going forward versus these -- obviously, the endorsements should help?
And usually, what's your sort of success in terms of an OEM and winning an endorsement from an OEM and then having it translated into sales? So that's on AccuTrade. The other question I had is around margins. At the midpoint, I think your guidance assumes like 100 basis points improvement year on year. I'm just trying to think what are the drivers for that? Is that mostly marketing expense or other lines, other OpEx items? Just talk about that a little bit.
And DealerClub, obviously, you said you're not asumming of a revenue contribution there but does it affect margins, at all? Thank you.

Alex Vetter

Thank you for your questions. Well, first of all, on AccuTrade, we were really pleased with the momentum that we demonstrated with the business in Q4, not only on gross sales and the pipeline expansion there, but obviously to your comment on the retention front, appraisal volume which we track closely is up a healthy 5% quarter over quarter, but as I mentioned on the call, from Q1 to Q4 appraisals are up 13%.
We're seeing that dealers are averaging 14% higher vehicles appraised via AccuTrade in Q4, and they're also buying more cars. Average dealer we can see through the appraisal technology that are buying about 19 cars a month through the platform. And so when you think about the auction fees for that kind of volume of vehicle acquisition and the fact that that inventory is fresher and creates a new sales opportunity, we think this product and platform is very disruptively priced and has tons of headroom on value.
We believe there's pricing opportunities with AccuTrade over time, but it starts with increasing usage. I think the reason that DealerClub was so well received at NADA is because AccuTrade dealers now having one click ejection to a wholesale marketplace for any vehicles that they don't want to retail. It's going to be a huge benefit once we integrate that technology and provide that capability so that a dealer can appraise a car and then launch it in a retail or wholesale market, depending on its desirability with singular -- without any (inaudible) of the data is a massive operational benefit that the AccuTrade dealer network will appreciate.
I think the OEM endorsements, as we sit on the call, 30% of our volume in Q4 came from OEMs that had previously endorsed AccuTrade. And so the fact that we've added eight new OEM endorsements certainly gives our sales force a fortified reason to get dealers to lean into this solution, and we think that will build closer towards the second quarter because it just takes time for dealers to implement AccuTrade in their store.
And so the endorsements now are important, but we think that'll have a bigger impact on the second half. I'll let -- Sonia, if you want to take the comment on the margin midpoint and the drivers there?

Sonia Jain

Yeah, no, I'm happy to. So related to margins, you're right, we did not bake in a huge revenue contribution from dealer Club. However, we have, in my opinion, prudently built in costs products associated with integrating and scaling the business. So that is having an impact on margins and putting a little bit of downward pressure on margins because we have baked the cost side into the equation here.
In terms of overall on a full year basis, the improvement in margins and the margin expansion, I would probably describe this as like a natural flow through benefit from the platform strategy. So as we're able to scale revenue and grow revenue, we would expect to see an increasing portion of that revenue then flow down to the bottom line.

Naved Khan

Thank you, Alex. Thank you, Sonia.

Operator

Gary Prestopino, Barrington Research.

Gary Prestopino

Good morning. I just want to be clear with the DealerClub integration. When will you have that fully completed? Are you looking for a launch in or the full integration to be completed by -- by the end of 2025?

Alex Vetter

I certainly would hope so, Gary. We actually have been taking preorders and getting dealers to register, and by the way, the product is functional today. Dealers are selling cars on the club every day. In fact, we have over 900 dealers register based on our debut at NADA. So compare that to AccuTrade, which has taken us a year to get to 1,000 dealers, the fact that we had 900 enrollments for DealerClub at the onset is pretty incredible.
So we're scaling dealers every day and vehicles are being transacted on the platform today. As to the AccuTrade integration and the ability to one click eject cars into the auction, we expect that integration work to be done in the first half of this year, so you'll see some margin compression as we ramp up technology investments to integrate DealerClub and AccuTrade together, but I would hope that to be completed in the first half of this year, which is why we get back to great margin profile for the full year.

Gary Prestopino

Okay, that's helpful. It just seems to me that this acquisition and the ability now as you have a headlight on one of your slides to manage the vehicle life cycle on a unified platform could really be a game changer. I mean, one click, you can appraise, one click, you can put the inventory value of the inventory, then you can either put it in the wholesale or retail channel. Is that what's exciting your dealer customers?
And then I just have another question on how you're going to bundle list with AccuTrade to drive sales growth.

Alex Vetter

Thanks, Gary. Our competition has a sort of a one trick pony, which is to recommend to dealers to lower the price of the car constantly, which just erodes dealers' profits, and our model's definitively different where we're rolling out inventory intelligence that shows dealers what the propensity for a vehicle to retail is, depending on the price point, the market. And as you know, some markets, geographies have a higher desirability for certain inventory than others.
And so, giving dealers the tools to be able to move vehicles to the most -- the highest yield outcome, whether that be retail or wholesale, we do think and know is a big major differentiator of our level playing field and our platform. And so the integration, we've got our AccuTrade dealers helping provide feedback to it. The inventory intelligence was co-developed with dealer partners providing us insights on what they disliked from existing IMS tools.
We've got market-leading technology both on inventory intelligence, AccuTrade, and DealerClub. Bringing that together is going to provide tremendous benefit. So obviously, we know that that gives us pricing power once we have dealers using the technology at scale. And so again, our choice right now is to be very low cost because we want to win adoption.
But I think when you think about the value of eliminating auction fees or being able to source inventory from your customers as opposed to the traditional auction, we're dropping massive savings to our dealers' bottom lines and so our technology solutions, we have tremendous upside in price.

Gary Prestopino

Yeah, and I guess the question I would have is, AccuTrade the subscription, DealerClub is a transaction. As you package this, are you contemplating just bundling it and maybe getting an upcharge on the entire monthly fee for the subscription if you bundle? Or is it still going to be subscription and transaction for each product?

Alex Vetter

It's premature to signal exactly where we're going to go, but we have talked about -- one of the benefits of DealerClub is that we pay sellers to sell on the platform and that there's an opportunity for us to say that your seller fees are higher if you're a marketplace customer, so we want to incentivize dealers to use more of our platform. I think when we look at our pricing model, we have a great opportunity to provide incentives for dealers to consolidate more of their technology into our system because we're going to protect their data as if it was our own and then we're also going to be able to provide them operational benefits and ease that spot solutions can't deliver on.
So yes, to the bundling question. We have opportunities. It's just premature for us and we'll test some different models in the first half of this year and hopefully align on a model that really motivates dealers to put more of their technology in our hands.

Gary Prestopino

Okay, thank you.

Alex Vetter

Thank you, Gary.

Operator

Marvin Fong, BTIG.

Marvin Fong

Great, good morning. Thanks for taking my questions. I guess I'll just start on the quarter. It looked like, if I'm not mistaken, website solution customers take down quarter over quarter. I was hoping you could shed some light on the dynamics we should be aware of there. And then I guess I'll just ask the bigger picture question that's on the minds of pretty much everyone.
I think even this morning some more [saber] rattling about tariffs. How did you incorporate the macro uncertainty into your full year guidance and how should investors kind of interpret your confidence in achieving the range, given all the volatility?

Alex Vetter

Sure, Marvin. Well, look, our website business was relatively flat in the quarter, but we still see tremendous upside, particularly as OEMs increased the requirements from a security and data standpoint. It's going to be very hard for a lot of the long-tailed players to keep up with the OEM requirements, and so we're well positioned, being endorsed by all OEMs to continue to build on this business. We're nowhere close to. 50% of the TAM here and so we see tremendous upside.
Our Canadian business obviously is growing at a faster clip, which has got even more headroom, and we're the number one provider in Canada today. So I think OEM relationships are very key here. We're going through a repackaging exercise with the manufacturers to show them how we can integrate more technologies like trade-in, like instant finance. That can eliminate cost for dealers because right now they're spending extra money for stand-alone solutions that siphon traffic away from the platform and our technologies are native and integrated directly into the system of records.
This industry is going to move towards consolidation, and we're positioned to be the market leader, I guess would be the short answer on it. I also think that integrating our technology will be key here. Our inventory intelligence platform giving dealer website customers added benefits that provide them diagnostics on their inventory is certainly a higher order value prop than just building their website.
And so again, you're seeing the platform come to life where now DI customers are going to have access to retail predictive data to run their business as being part of the Cars Commerce platform. And so I just think that the value that we're adding to our website platform plus the OEM endorsements give us tons of headroom here as well. And I'll let Sonia comment on the tariffs and full year guide.
My general belief, Marvin, is that this business has proven super resilient through all economic cycles and the macro changes in OEM and supplier relationships has never in the past impacted our applicability to consumers or the industry. And so I don't see any impact there on the tariff side, but maybe Sonia could comment on the full year guide.

Sonia Jain

Yeah, I mean, I think we're assuming a relatively stable macro environment like most others out there, we're actively watching key macro indicators, consumer affordability, interest rates, inventory levels, all of those things can impact both dealer budgets as well as OEM budgets as well. As you probably have noticed from the guide we provided for the first half and particularly Q1, we are expecting dealer profitability to be a bit under pressure as you look at the beginning of the year.
But we're also very confident in the initiatives that we have planned for the back half of the year, specifically related to repackaging, bundling more of our platform for dealer customers to make it accessible, which will strengthen value delivery and retention of our products over the long term. So we're monitoring actively. We're assuming a relatively stable macro and we do have a lot of confidence in the initiatives we have planned for the year.

Marvin Fong

Got it. That's great. And if I could just maybe sneak in one more just on dealerClub. It looks to me, if I'm not mistaken, you grew dealers from the time you announced the deal by several 100 about 250. I mean, just the level set expectations, I mean, should we kind of think of -- how should we kind of think about the expectations for dealer account growth in that product line for 2025? Thanks.

Alex Vetter

Well, look, it's early here, so I guess I want to temper expectations to a degree. However, the founder of DealerClub is a proven operator who's scaled a similar dealer-to-dealer marketplace exchange to $300 million in just a matter of a few short years. And so we have pedigree knowledge in-house who has a track record of success and has scaled marketplaces.
Importantly, DealerClub, we're doing it at that light, right? We're not carrying huge inspector costs or building in huge arbitration operations because we're relying on dealer reputation to govern the marketplace. And so what I'm thrilled about DealerClub is we really see a path for a low-cost disruptive technology play as opposed to one that requires tremendous labor costs and can really generate platform efficiency.
And then when you look at just the opportunity, DealerClub needed scale and when we showed them that we have tremendous listings or access to inventory with accurate aging data where we can target our opportunity to the vehicles that we know are growing [beards] on dealer lots, like we can help dealers target inventory and say we need to move this inventory down market to wholesale, and that opens up a massive opportunity. Just 1% of this market is a $100 million dollar revenue stream.
And it's very early on though, but we think the technology is incredible and the dealer feedback to the technology has been very affirmative in terms of this being a better way to transact inventory dealer to dealer and all the established players that occupy this market today.

Marvin Fong

Got it. That sounds great. Thanks, Alex. Thanks, Sonia. I appreciate it.

Operator

Joe Spak, UBS.

Joseph Spak

Thank you so much. Sonia, maybe just to go back to the margins and the guidance. The first quarter EBITDA margin guidance is like 450 basis points of quarter-over-quarter degradation, which is, I think more than that sort of seasonal average over the past five years. I think it's been closer to about 200 basis points. So what's really driving that?
And then I guess, to maybe flip it around a little bit like even on a year-to-year basis it's 300 basis points. So to get to that 80 bps for the year, you need to average almost 180 over the next three quarters, and it sounds like the revenues back end weighted, so I guess it's an even larger number as you get to the back half. So can you just help us unpack and understand what's really driving the cadence of margins through the year?

Sonia Jain

Yeah, so Q1 margins are reflective of kind of the Q4 exit rate, particularly the dealer revenue exit rate. So I would say that's one factor. And since it was down slightly on a year-over-year basis, that's going to have some impact into our starting point margins for the year.
In addition, as we've mentioned, we are heavily investing in the DealerClub integration. We want to get this done as quickly as possible, so that is also weighing a bit on the Q1 margin guidance. I would say those are the primary reasons. Otherwise, other than that, typically we do see Q1 margins as being our lower margins of the year with margin typically steadily ramping over the course of the year.
But I would say that's the specific callout related to Q1. In terms of expansion, over the course of the year that follows, our typical seasonal trends and given that some of the growth in the year is back half weighted, we'll expect margins to pick up fairly significantly as we get to the second half of the year.

Joseph Spak

Okay, so it's basically just some additional spending early on and then sort of a ramping of some of the initiatives with dealers that helps drive the revenue growth in the back half effectively.

Sonia Jain

That is correct.

Joseph Spak

Okay. And then second question, Alex. I don't think the AI question has sort of come up in a while. I know you've been dabbling or sort of more than that, I guess in AI for a while. But I was wondering if you could just update us on dealerships like either inquiring or taking a plunge on Gen AI solutions and is it anything beyond sort of consumer facing chatbots? Like are there -- are you working on or are they looking for solutions that can actually help more dealer operation efficiencies and maybe just update us on what you're investing annually in AI?

Alex Vetter

Joe, thanks for the question. I'm smiling at the opportunity to talk about it. So, one of the biggest trends that we're seeing with AI is dealerships finding ways to eliminate their back-office cost and expense, and many dealerships operate business development centers that handle lead gen. In a couple of pilots that we've tested with dealers who've cited low lead quality or low closing ratio.
We've replaced that dealership's lead volume with AI to handle lead volume, and in some cases we're seeing 20% less in appointments set and sales attributed to our platform, which I think both underscores the quality of our audience being understated in the minds of dealerships because lead handling is such a critical component to realizing and attributing value back to our platform.
And it's obviously a big cost center for dealerships. And so those are some of the pilots that we're working on right now that we think can really help us combat churn when dealers say that our leases don't close, let's take a challenge and let AI manage the volume on behalf of the dealer and see if we can deliver a better appointment setting and show rate, and it really shows the quality of our audience.
And so that's got me very excited. Certainly from a product standpoint, right, inventory intelligence and leveraging retail demand data in real time to predict that the best exit path for a vehicle retail or wholesale is powerful disruptive tech and so dealers are excited about the fact that we're using real-time retail demand data.
Most dealers rely on Manheim's MMR data, which is wholesale backwards looking failure rate data. We're showing them forward-looking predictive data. And so I think the industry is going to take some time to adopt new technologies that allow them to run their business much more proactively, but the opportunity here is huge.

Joseph Spak

Any commentary on how much you're spending annually and directionally, maybe even for '25 versus 24? If you're spending more or similar amounts?

Alex Vetter

It's hard to break it out because we want our employees to be embracing AI across the whole platform and don't have a separate team experimenting with AI. We're challenging the whole workforce to apply AI to everything that we do and to find efficiencies in the way we work. And so it would be hard for me to like quantify a dedicated investment to it, but my hope is that it's pervasive throughout the business over time and we get leverage in every functional area in the company.

Joseph Spak

Thanks for that. I appreciate it.

Operator

Rajat Gupta, J.P. Morgan.

Rajat Gupta

Great, thanks for taking the question and squeezing me in here. I had a follow-up on the second half revenue growth ramp. You mentioned some areas like the full benefit of AccuTrade endorsement, as one of the drivers, can you elaborate a bit more on other drivers, that will help with the second half ramp, maybe any more granularity on dealer account, ARPD? What is going on in the repackaging initiatives?
Anything in terms of what percentage of the dealers are on lower tiers versus higher tiers? How many of them do you expect to upgrade? Any more granular color that you could give us would be helpful. Let's speak to the guide and have one follow-up on the buyback.

Alex Vetter

Yeah, what's exciting to me is a lot of our AccuTrade growth is coming from dealers expanding the number of stores in their groups to use the technology. So the fact that AccuTrade is proving to be successful in one store is giving owners confidence to standardize this across all of their dealership operations and with industry consolidation being a reliable trend.
The expansion of AccuTrade rides on that consolidation. It benefits from it, and dealerships are looking to standardize processes and get leverage off of a wider footprint of dealerships, and our technology can enable that. Not to mention just the labor savings and being able to use porters to appraise vehicles as opposed to high price specialists. There's multiple economic benefits to using technology to appraise vehicles as opposed to human curation.
And so that would be one. The OEM endorsements certainly are going to help, but I really believe embedding added benefits like the inventory intelligence platform, in some cases dealerships are spending. $3,000 to $5,000 a month for a standalone inventory intelligence tool that doesn't integrate.
So the fact that we're providing inventory intelligence as part of that platform is certainly another reason to believe. And then finally integrating wholesale ejection so that dealers can launch a car they appraised in real time to a wholesale marketplace before they've even taken ownership of the car and get that marketed on a wholesale marketplace is another benefit.
So product's going to lead the way here. And dealer usage trends as we shared on the call are all up double digits and so that gives a lot of fortification for this platform having tremendous upsides.

Sonia Jain

Maybe, Rajat, also to add a little bit more context if we look at 2025, I would say there are a couple primary drivers of growth and maybe we can break it down between dealer account and ARPD. We do expect to grow dealer customers in 2025. I think it's a couple different drivers that I would point to there. Obviously, we're making some organizational changes that we believe will help accelerate our sales velocity. So that would be one.
But I think when you look at just the core marketplace, we are really pleased to see how we exited the year from a competitive perspective in terms of traffic trends, which we believe are a leading indicator of marketplace health and we were number one in in UVs at the end of the year. In addition, from a product perspective, as Alex mentioned, product is going to lead the way here. We're heavily focused on ensuring that we're getting appropriate attribution for the value we're delivering. We've shared some stats in the past. We know when we get access to dealer DMS data that we're influencing in the neighborhood of 30% of their retail sales.
And so when you do the math there, it actually leads to the second driver of revenue growth, which is ARPD, but the value we deliver is undeniable. So yes, we believe there's an opportunity and it is included in our guide to enhance our marketplace packaging structure. 75% of our marketplace customers are in premium and preferred packages today, which means that we have headroom to elevate the packages. We've talked a lot in the past about the addition of additional products in terms into the marketplace to create a higher tier solution, and that's something that we'll be looking at later this year to go live in the market.
And then I think Alex alluded to this as well. We've done a few of these over the last year or two in terms of renegotiating our legacy website agreements with OEMs. That's still something that's underway, and while we do believe there's opportunity to continue to grow website units, we also believe they're sort of still relatively untapped opportunity for us to grow ARPD through these contract renegotiations and move our website package tiers north.
So when you look at the website mix of who's in, good, better, best tiers, we have a lot of opportunity to move the portion in good to better and best. So I hope that helps in terms of color a little bit.

Rajat Gupta

No, definitely, thanks for all the detail. And just on the buyback, I mean the pickup in 2025 is definitely encouraging, especially given where the stock is. I guess, given where you are from a leverage standpoint at the low end of the range, just given the free cash flow in the business, is there room to be like a lot more aggressive versus the range you've provided?
Obviously, the earnouts play a role in the available free cash flow, but I'm just curious like how you're looking at that, especially with some of the more recent pullback here in the share price? Thanks.

Sonia Jain

Yeah, no, great question. I appreciate it. I think we put a target out there to help everyone kind of size what that looks like, but certainly, when it comes to share repurchases, we will be opportunistic in terms of how we put that capital to work. And certainly at current valuation and given our guide, we see a lot of upside in the business.

Rajat Gupta

Understood. Thanks and good luck.

Operator

Doug Arthur, Huber Research.

Doug Arthur

I got to jump on a 10 o'clock call, so I will hold off until the follow-up. Thank you.

Operator

Thank you. There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Goodbye.