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Nov 5, 2026, 4:10 PM ETConsumer Cyclical

CarGurus — Third Quarter 2026 Earnings Summary

CARGCARGURUS INC
Source

Financial Performance

  • Q3 2026 revenue was $258.4 million, representing a 12% year-over-year increase; full-year revenue through Q3 was $752.9 million, up 13% YoY.
  • GAAP net income from continuing operations for Q3 2026 was $52.8 million, a 2% increase YoY; for the nine months ended September 30, 2026, it was $134.2 million, a 6% decrease YoY.
  • Non-GAAP Adjusted EBITDA from continuing operations for Q3 2026 was $89.7 million, up 9% YoY; for the nine months ended September 30, 2026, it was $254.6 million, up 10% YoY.
  • Gross profit margin remained at 92% for both the three and nine months ended September 30, 2026, a decrease of 92 basis points and 93 basis points respectively compared to the prior year periods.
  • Non-GAAP Adjusted EBITDA margin was 35% for Q3 2026 (down 89 bps YoY) and 34% for the nine months ended September 30, 2026 (down 80 bps YoY).
  • GAAP operating expenses for Q3 2026 were $169.1 million, up 12% YoY; for the nine months ended September 30, 2026, they were $521.8 million, up 18% YoY, which included $19.7 million in impairments.
  • Net cash provided by operating activities for Q3 2026 was $80.8 million; non-GAAP free cash flow for the quarter was $73.9 million.
  • Cash and cash equivalents at period end were $164.9 million, a 13% decrease from December 31, 2025.
  • Deferred revenue increased to $25.6 million as of September 30, 2026, from $23.6 million as of December 31, 2025.

Guidance and Future Outlook

  • Q4 2026 revenue guidance is set between $258.5 million and $263.5 million.
  • Q4 2026 Non-GAAP Adjusted EBITDA guidance is between $93.0 million and $101.0 million.
  • Q4 2026 Non-GAAP earnings per share guidance is between $0.73 and $0.79.
  • Full-year 2026 revenue guidance is between $1,011.5 million and $1,016.5 million, representing 11.5% to 12.1% YoY growth.
  • Full-year 2026 Non-GAAP Adjusted EBITDA guidance is between $347.5 million and $355.5 million, with a margin change of (0.8)% to (0.2)% YoY.
  • Full-year 2026 Non-GAAP earnings per share guidance is between $2.66 and $2.72.
  • Guidance assumptions rely on recent market trends regarding paid dealer acquisition, churn, and expansion activity, excluding macro-level industry issues or potential foreign currency impacts.

Business Segments and Product Lines

  • Total paying dealers reached 34,701 as of September 30, 2026, a 3% increase YoY, comprising 26,402 U.S. dealers (up 3%) and 8,299 International dealers (up 5%).
  • Consolidated Quarterly Average Revenue per Subscribing Dealer (QARSD) was $6,955, up 7% YoY; U.S. QARSD was $8,308 (up 7%) and International QARSD was $2,715 (up 14%).
  • Revenue by geographic region for Q3 2026 was $232.5 million from the U.S. and $25.9 million from International markets.
  • The company is expanding its AI-enabled solutions across the dealer workflow, including the launch of "StockVantage" for its inventory pillar.
  • The company is developing AI tools for consumers to meet shoppers in platforms they already use.
  • CarOffer, LLC was wind-down completed as of December 31, 2025, with no results of operations classified as discontinued operations for the three and nine months ended September 30, 2026.

Market and Competitive Landscape

  • CarGurus is identified as the No. 1 visited automotive shopping site in the U.S. based on Similarweb Q3 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.
  • The company notes it is the No. 1 visited automotive shopping site in the U.S. compared to Autotrader.com, Cars.com, TrueCar.com, and CARFAX.com.
  • The company faces competition in a very competitive and rapidly changing environment.

Risks and Challenges

  • Forward-looking statements are subject to risks including growth ability, dealer relationships, competition, market growth, innovation, inflation, interest rates, and global supply chain challenges.
  • Risks include changes in international trade policies, tariffs, volatile economic conditions, and macroeconomic issues in the U.S. and abroad.
  • Potential impacts from new or modified laws and regulations, including tax laws, are cited as risks.
  • The variability of reconciling items between GAAP and non-GAAP measures (such as stock-based compensation, impairments, and depreciation) could significantly impact future GAAP results.
  • Guidance excludes potential impacts from future foreign currency exchange gains or losses and assumes no material changes in recent market trends by dealers or consumers.

Management Commentary and Tone

  • CEO Jason Trevisan stated the company delivered strong third-quarter results with revenue at the high end of guidance and Adjusted EBITDA near the high end.
  • Management emphasized bringing products to market faster and building from a marketplace foundation into broader AI-enabled solutions.
  • The tone highlighted disciplined execution and robust free cash flow as positioning the company to create long-term value for stockholders.
  • Management expressed a goal to become the expert guide for car shopping in an AI-led world.

Other Key Points

  • The Board of Directors authorized a new $250.0 million share repurchase program.
  • During the nine months ended September 30, 2026, the company recognized $20.2 million in impairments, including $0.5 million in cost of revenue and $19.7 million in operating expenses.
  • Stock-based compensation expense for the nine months ended September 30, 2026, was $39.6 million.
  • The company hosted a conference call and webcast on November 5, 2026, to discuss results and outlook.
  • CarGurus operates as a leading multinational automotive platform with a mission to bring trust and transparency to car shopping.