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Aug 6, 2026, 4:11 PM ETConsumer Cyclical

CarGurus — Second Quarter 2026 Earnings Summary

CARGCARGURUS INC
Source

Financial Performance

  • Q2 2026 revenue grew 13% year-over-year to $251.0 million; six-month revenue was $494.5 million, up 14% YoY.
  • Q2 2026 GAAP net income from continuing operations was $49.2 million (flat vs. prior year); six-month GAAP net income was $81.4 million, down 11% YoY.
  • Q2 2026 non-GAAP adjusted EBITDA from continuing operations was $84.7 million, up 7% YoY; six-month non-GAAP adjusted EBITDA was $165.0 million, up 11% YoY.
  • Gross profit margin was 92% for both Q2 and the first six months of 2026, down 86 and 93 basis points respectively compared to the prior year.
  • Non-GAAP adjusted EBITDA margin was 34% in Q2 2026 (down 199 bps YoY) and 33% for the six months (down 74 bps YoY).
  • Cash flow from operations was $94.6 million in Q2 2026; non-GAAP free cash flow was $87.7 million.
  • Cash and cash equivalents stood at $122.1 million as of June 30, 2026, a 36% decrease from December 31, 2025.
  • Deferred revenue increased to $24.96 million at period end from $23.56 million at the start of the year.
  • Operating expenses were $168.1 million in Q2 (up 15% YoY) and $352.7 million for the six months (up 20% YoY), including $0.5 million in impairments for the quarter and $20.2 million for the six months.

Guidance and Future Outlook

  • Q3 2026 total revenue guidance is $253.5 million to $258.5 million.
  • Q3 2026 non-GAAP adjusted EBITDA guidance is $82.0 million to $90.0 million.
  • Q3 2026 non-GAAP earnings per share guidance is $0.63 to $0.69, assuming 90.0 million diluted weighted-average common shares outstanding.
  • Full-year 2026 revenue growth guidance is 10% to 13% year-over-year.
  • Full-year 2026 non-GAAP adjusted EBITDA margin guidance is a decrease of 0.5% to 1.5% year-over-year.
  • Guidance excludes macro-level industry issues, potential impacts of future foreign currency exchange gains or losses, and assumes no material changes to dealer/consumer market trends.

Business Segments and Product Lines

  • International business showed continued momentum with International paying dealers growing 11% YoY to 8,478.
  • U.S. paying dealers grew 3% YoY to 26,151; total paying dealers increased 5% YoY to 34,629.
  • Consolidated Quarterly Average Revenue per Subscribing Dealer (QARSD) was $6,771, up 7% YoY.
  • International QARSD was $2,568, up 11% YoY; U.S. QARSD was $8,134, up 8% YoY.
  • Management introduced "Guru," a consumer-facing AI layer, to advance the strategy of becoming an AI-led expert consumer guide.
  • The company expanded the use of data and predictive intelligence in dealer workflows through AI-powered products.
  • CarOffer, LLC was wind-down completed as of December 31, 2025, with no assets or liabilities classified as discontinued operations as of June 30, 2026.

Market and Competitive Landscape

  • CarGurus is identified as the No. 1 visited automotive shopping site in the U.S. based on Similarweb Q2 2026 data.
  • The company operates online marketplaces in the U.S., U.K., and Canada, including the PistonHeads brand in the U.K. and Autolist in the U.S.
  • Management stated that deeper engagement driven by dealer and consumer initiatives strengthens the company's competitive position.

Risks and Challenges

  • Forward-looking statements are subject to risks including inflation, interest rates, global supply chain challenges, and changes in international trade policies or tariffs.
  • Risks include volatile economic conditions, changes in tax law, and the impact of new or improved technologies like AI.
  • Actual results may vary from guidance due to variability in reconciling items such as depreciation, amortization, stock-based compensation, impairments, and income tax effects.
  • The company notes that guidance excludes potential impacts of future foreign currency exchange gains or losses.

Management Commentary and Tone

  • CEO Jason Trevisan described the results as "strong," citing 13% revenue growth and continued momentum in the International business.
  • Management expressed confidence that AI-driven initiatives and deeper engagement create durable long-term value for customers and stockholders.
  • The tone regarding the strategic shift to an AI-led expert consumer guide was positive, emphasizing the advancement of the broader strategy.

Other Key Points

  • The company repurchased $29.2 million worth of shares in Q2 2026.
  • Total share repurchases since December 2022 have exceeded 30% of shares outstanding.
  • Financing activities in Q2 included $27.7 million in repurchases of common stock and $2.7 million in excise tax payments related to repurchases.
  • Six-month share repurchases totaled $202.1 million.
  • The company operates with a dual-class stock structure (Class A and Class B common stock).