CarGurus Announces Third Quarter 2025 Results

Q3’25 Marketplace revenue grew 14% YoY to $232 million, above the midpoint of our guidance range GAAP Marketplace (U.S. Marketplace Segment and Other) operating income of $64.1 million; Non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA of $82.4 million, up 18% YoY, above the midpoint of our guidance range Further advanced our innovative AI-powered solutions with PriceVantage, Dealership Mode, and CG Discover Repurchased $111 million worth of shares in Q3’25; have repurchased 23% of shares outstanding since initiation of buyback program in December 2022 BOSTON, Nov. 06, 2025 (GLOBE NEWSWIRE) -- CarGurus, Inc. (Nasdaq: CARG), the No. 1 visited automotive shopping site in the U.S.1, today announced financial results for the third quarter ended September 30, 2025. “We delivered another quarter of strong Marketplace revenue growth as dealers have increasingly adopted our data-driven tools,” said Jason Trevisan, Chief Executive Officer at CarGurus. “Our product innovation is driving measurable ROI across more areas of the dealership, like inventory, pricing, marketing, and data intelligence. That adoption, coupled with strong execution, has fueled solid growth in both our U.S. and international businesses. We believe these trends position us well to extend our leadership, deepen customer relationships, access new market segments, and drive long-term growth.” Third Quarter Financial Highlights Below are our third quarter financial highlights for the three and nine months ended September 30, 2025. The amounts in the tables below may not sum due to rounding. Three Months Ended Nine Months Ended September 30, 2025 September 30, 2025 Results(in millions) Variance from Prior Year Results(in millions) Variance from Prior Year Revenue Marketplace Revenue$231.7 14% $665.9 14%Wholesale Revenue 2.2 (81)% 16.3 (61)%Product Revenue 4.8 (69)% 15.7 (59)%Total Revenue$238.7 3% $697.9 5% Gross Profit(1)$213.5 17% $617.6 14%% Margin 89% 1,055 bps 88% 741 bps Operating Expenses(2)$158.9 2% $492.3 (15)% GAAP Marketplace (U.S. Marketplace Segment and Other) Operating Income(3)$64.1 22% $177.5 33%% Margin 28% 182 bps 27% 382 bps Non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA(4)$82.4 18% $232.1 25%% Margin(4) 36% 122 bps 35% 310 bps GAAP Net Income(3)$44.7 99% $106.1 NM(6) % Margin 19% 900 bps 15% NM(6) Non-GAAP Adjusted EBITDA(4)$78.7 21% $222.3 30%% Margin(4) 33% 491 bps 32% 619 bps Cash and Cash Equivalents at period end(5)$178.8 (41)% $178.8 (41)% (1) There was no impairment of other assets for the three months ended September 30, 2025. During the three months ended September 30, 2024, we recorded $9.8 million of impairments in cost of revenue. During the nine months ended September 30, 2025 and 2024, we recorded $2.9 million and $9.9 million, respectively, of impairments in cost of revenue.(2) During the three months ended September 30, 2025, there was no impairment recorded. During the three months ended September 30, 2024, we recorded $7.0 million of impairments in operating expenses. During the nine months ended September 30, 2025 and 2024, we recorded $29.6 million and $134.5 million, respectively, of impairments in operating expenses.(3) During the three months ended September 30, 2025, there was no impairment recorded. During the three months ended September 30, 2024, we recorded $16.8 million of impairments. During the nine months ended September 30, 2025 and 2024, we recorded $32.6 million and $144.4 million, respectively, of impairments.(4) For more information regarding our use of non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA, non-GAAP Adjusted EBITDA, and other non-GAAP financial measures, please see the reconciliations of GAAP financial measures to non-GAAP financial measures and the section titled “Non-GAAP Financial Measures and Other Business Metrics” below.(5) Variance represents the change from December 31, 2024.(6) Not meaningful. Three Months Ended Nine Months Ended September 30, 2025 September 30, 2025 Results Variance from Prior Year Results Variance from Prior Year Key Performance Indicators(1) U.S. Paying Dealers(2) 25,743 5% 25,743 5%International Paying Dealers(2) 7,930 11% 7,930 11%Total Paying Dealers(2) 33,673 6% 33,673 6% U.S. QARSD$7,742 8% $7,742 8%International QARSD$2,375 15% $2,375 15%Consolidated QARSD$6,492 8% $6,492 8% Segment Reporting(in millions) U.S. Marketplace Segment Revenue$210.4 12% $608.3 13%U.S. Marketplace Segment Operating Income$61.0 21% $169.6 34%Digital Wholesale Segment Revenue$7.0 (74)% $32.0 (60)%Digital Wholesale Segment Operating Loss(3)$(9.4) 63% $(52.3) 70% (1) For more information regarding our use of Key Performance Indicators, please see the section titled “Non-GAAP Financial Measures and Other Business Metrics” below.(2) Metrics presented as of September 30, 2025.(3) For the three months ended September 30, 2025, there was no impairment recorded. For the three months ended September 30, 2024, Digital Wholesale Segment Operating Loss is inclusive of $16.8 million of impairments. For the nine months ended September 30, 2025 and 2024, Digital Wholesale Segment Operating Loss is inclusive of $32.6 million and $144.4 million, respectively, of impairments. Fourth Quarter and Full-Year 2025 Guidance The table below provides CarGurus’ guidance, which is based on recent market trends, industry conditions, and management’s expectations and assumptions as of today. Fourth Quarter 2025 Guidance MetricsValuesMarketplace Revenue(1)$236.0 million to $241.0 millionNon-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA$83.0 million to $91.0 millionNon-GAAP Earnings per Share$0.61 to $0.67 (1) Marketplace revenue consists of U.S. Marketplace Segment and Other revenue. Full-Year 2025 Guidance MetricsValuesMarketplace Revenue (1)$902.0 million to $907.0 millionNon-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA$313.0 million to $321.0 millionNon-GAAP Earnings per Share$2.19 to $2.25 (1) Marketplace revenue consists of U.S. Marketplace Segment and Other revenue. The fourth quarter and full-year 2025 non-GAAP earnings per share calculations assume 97.0 million and 101.0 million, respectively, diluted weighted-average common shares outstanding. The assumptions that are built into guidance for the fourth quarter and full-year 2025 regarding our pace of paid dealer acquisition, churn, and expansion activity for the relevant period are based on recent market trends and industry conditions. Guidance for the fourth quarter and full-year 2025 excludes macro-level industry issues that result in dealers and consumers materially changing their recent market trends or that cause us to enact measures to assist dealers. Guidance also excludes any potential impact of future foreign currency exchange gains or losses. CarGurus may incur charges, realize gains or losses, or experience other events or circumstances in 2025 that could cause any of these assumptions to change and/or actual results to vary from this guidance. CarGurus has not reconciled its guidance of non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA to GAAP Marketplace (U.S. Marketplace Segment and Other) operating income or non-GAAP earnings per share to GAAP earnings per share because we are unable to accurately predict without unreasonable effort the exact amount or timing of certain reconciling items between such GAAP and non-GAAP financial measures, including, as applicable, depreciation expenses, amortization of intangible assets, non-intangible amortization, stock-based compensation, transaction-related expenses, and income tax effects. The variability of these reconciling items could have a significant impact on our future GAAP reported results. Conference Call and Webcast Information CarGurus will host a conference call and live webcast to discuss its third quarter 2025 financial results and business outlook at 5:00 p.m. Eastern Time today, November 6, 2025. To access the conference call, dial (877) 451-6152 for callers in the U.S. or Canada, or (201) 389-0879 for international callers. The webcast will be available live on the Investors section of CarGurus’ website at investors.cargurus.com. An audio replay of the call will also be available to investors beginning at approximately 8:00 p.m. Eastern Time today, November 6, 2025, until 11:59 p.m. Eastern Time on November 20, 2025, by dialing (844) 512-2921 for callers in the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 13755566. In addition, an archived webcast will be available on the Investors section of CarGurus’ website at investors.cargurus.com. About CarGurus CarGurus (Nasdaq: CARG) is the leading multinational automotive platform helping consumers and dealers confidently buy and sell vehicles. Founded in 2006 with a mission to bring more trust and transparency to car shopping, CarGurus is the No. 1 visited automotive shopping site in the U.S.1 with the largest selection of inventory and network of dealers.2 CarGurus’ unmatched selection, trusted automotive insights, and data-driven products and solutions support each shopper’s journey — from online research and shopping to in-dealership decisions — to empower them at every step. And, by translating data from billions of monthly site interactions, CarGurus provides dealers a personalized, predictive intelligence platform with software solutions that helps them run their businesses more efficiently and profitably at all stages of inventory acquisition and pricing, marketing, and conversion to sale. CarGurus operates online marketplaces in the U.S., U.K., and Canada. The company’s network of brands includes PistonHeads, the largest online motoring community in the U.K.3, and Autolist, a U.S.- based online marketplace. To learn more about CarGurus, visit www.cargurus.com. 1 Similarweb: Traffic and Engagement Report [Cars.com, Autotrader.com, TrueCar.com, CARFAX.com Listings (defined as CARFAX.com Total Visits minus Vehicle History Reports)], Q3 2025, U.S.2Compared to Autotrader.com (YipitData July/August 2025), Cars.com, TrueCar.com (YipitData as of September 30, 2025), and CARFAX (Joreca as of September 30, 2025).3 Similarweb: Traffic Insights, Q3 2025, U.K. CarGurus® and Autolist® are each a registered trademark of CarGurus, Inc., CarOffer® is a registered trademark of CarOffer, LLC, and PistonHeads® is a registered trademark of CarGurus Ireland Limited in the U.K. and the European Union. All other product names, trademarks, and registered trademarks are property of their respective owners. © 2025 CarGurus, Inc., All Rights Reserved. Cautionary Language Concerning Forward-Looking Statements This press release includes forward-looking statements. Other than statements of historical facts, all statements contained in this press release, including statements regarding our future financial and operating results; our fourth quarter and full-year 2025 financial and business performance, including guidance; the expectations about our intended wind-down of CarOffer, LLC ("CarOffer"), including the Dealer-to-Dealer and Instant Max Cash Offer products (the “CarOffer Transactions Business"), such as expected costs and timing; our plans to focus on technology and analytics that will enable smarter sourcing and pricing decisions; our business and growth strategy and our plans to execute on our growth strategy; our ability to grow our business profitably and efficiently; our capital allocation and investment strategy; the attractiveness and value proposition of our current offerings and other product opportunities; our ability to maintain existing and acquire new customers; addressable opportunities; our expectation that we will continue to invest in growth initiatives; our ability to quickly make transformations necessary for our business to achieve long-term goals; and our ability to overcome challenges facing the automotive industry ecosystem, including inventory supply problems, global supply chain challenges, including disruptions to pre-existing supply chains and vendor relations, changes to trade policies or tariff regulations, financial market volatility and disruption, increased interest rates, inflationary concerns, and other macroeconomic issues, including uncertain or volatile economic conditions in the U.S. and abroad, are forward-looking statements. The words “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “guide,” “guidance,” “intend,” “may,” “might,” “plan,” “potential,” “predicts,” “projects,” “seeks,” “should,” “strive,” “target,” “will,” “would,” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including risks related to our growth and our ability to grow our revenue; our relationships with dealers; competition in the markets in which we operate; market growth; our ability to implement our plan to wind down CarOffer, including the CarOffer Transactions Business; failure to achieve expected organizational efficiencies from the wind-down; the estimated timing and costs associated with the wind-down; the impact the wind-down will have on our operations; disruptions in relationships with dealers, customers, vendors, contractors, and employees given our decision to wind down CarOffer, including the CarOffer Transactions Business; unanticipated developments that may prevent, delay, or increase the costs associated with the wind-down activities; the potential impact on our business due to the announcement of the wind-down; our ability to innovate; our ability to realize benefits from our acquisitions and successfully implement the integration strategies in connection therewith; increased inflation and interest rates, global supply chain challenges, changes in international trade policies, including tariffs, volatile economic conditions, and other macroeconomic issues; the impact of changes in tax law and related guidance and regulations that may be implemented, including on tax rates, our business, and our financial results; changes in our key personnel; natural disasters, epidemics, or pandemics; and our ability to operate in compliance with applicable laws as well as other risks and uncertainties as may be detailed from time to time in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other reports we file with the U.S. Securities and Exchange Commission. Moreover, we operate in very competitive and rapidly changing environments. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, we cannot guarantee that future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release. Investor Contact: Kirndeep SinghVice President, Head of Investor Relationsinvestors@cargurus.com Media Contact: Maggie MeluzioDirector, Public Relations and External Communicationspr@cargurus.com Unaudited Condensed Consolidated Balance Sheets(in thousands, except share and per share data) As ofSeptember 30,2025 As ofDecember 31,2024 Assets Current assets Cash and cash equivalents$178,834 $304,193 Accounts receivable, net of allowance for doubtful accounts of $1,186and $788, respectively 39,612 44,248 Inventory — 338 Prepaid expenses, prepaid income taxes, and other current assets 36,078 27,868 Deferred contract costs 14,843 12,523 Restricted cash 21 2,036 Total current assets 269,388 391,206 Property and equipment, net 132,934 130,010 Intangible assets, net 3,493 11,767 Goodwill 28,409 46,167 Operating lease right-of-use assets 116,665 121,484 Deferred tax assets 92,706 106,672 Deferred contract costs, net of current portion 12,842 13,196 Other non-current assets 4,035 4,034 Total assets$660,472 $824,536 Liabilities and stockholders’ equity Current liabilities Accounts payable$30,350 $26,410 Accrued expenses, accrued income taxes, and other current liabilities 30,546 35,975 Deferred revenue 23,643 21,661 Operating lease liabilities 9,317 9,005 Total current liabilities 93,856 93,051 Operating lease liabilities 183,944 183,739 Deferred tax liabilities 26 26 Other non–current liabilities 7,197 6,031 Total liabilities 285,023 282,847 Stockholders’ equity Preferred stock, $0.001 par value per share; 10,000,000 shares authorized;no shares issued and outstanding — — Class A common stock, $0.001 par value per share; 500,000,000 sharesauthorized; 81,908,990 and 89,002,571 shares issued and outstandingat September 30, 2025 and December 31, 2024, respectively 82 89 Class B common stock, $0.001 par value per share; 100,000,000 sharesauthorized; 14,216,250 and 14,986,745 shares issued and outstandingat September 30, 2025 and December 31, 2024, respectively 14 15 Additional paid-in capital 6,776 169,013 Retained earnings 367,187 375,119 Accumulated other comprehensive income (loss) 1,390 (2,547)Total stockholders’ equity 375,449 541,689 Total liabilities and stockholders’ equity$660,472 $824,536 Unaudited Condensed Consolidated Income Statements(in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenue Marketplace$231,653 $204,019 $665,886 $586,405 Wholesale 2,249 12,107 16,271 41,351 Product 4,794 15,232 15,730 38,090 Total revenue 238,696 231,358 697,887 665,846 Cost of revenue(1) Marketplace 16,946 13,521 46,755 41,051 Wholesale(2) 3,366 20,415 17,883 47,272 Product 4,852 14,871 15,628 37,567 Total cost of revenue 25,164 48,807 80,266 125,890 Gross profit 213,532 182,551 617,621 539,956 Operating expenses Sales and marketing 89,368 81,216 260,421 245,801 Product, technology, and development 36,316 36,359 106,936 108,484 General and administrative 28,463 28,187 82,305 83,682 Impairments — 7,026 29,633 134,501 Depreciation and amortization 4,711 2,329 13,053 7,354 Total operating expenses 158,858 155,117 492,348 579,822 Income (loss) from operations 54,674 27,434 125,273 (39,866)Other income, net Interest income 2,292 2,717 7,524 9,063 Other (expense) income, net (399) (94) (271) 122 Total other income, net 1,893 2,623 7,253 9,185 Income (loss) before income taxes 56,567 30,057 132,526 (30,681)Provision for (benefit from) income taxes 11,850 7,546 26,421 (5,772)Net income (loss)$44,717 $22,511 $106,105 $(24,909)Net income (loss) per share attributable to common stockholders Basic$0.46 $0.22 $1.06 $(0.24)Diluted$0.45 $0.21 $1.04 $(0.24)Weighted-average number of shares of common stock used incomputing net income (loss) per share attributable to common stockholders Basic 98,170,081 103,321,988 100,033,516 104,769,518 Diluted 99,722,575 105,059,283 101,640,190 104,769,518 (1) For the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024, cost of revenue includes $2,645, $2,849, $7,539, and $10,968, respectively.(2) For the three months ended September 30, 2025, there was no impairment recorded in cost of revenue. For the three months ended September 30, 2024, and for the nine months ended September 30, 2025 and 2024, we recorded $9,750, $2,919, and $9,930, respectively, in impairments. Unaudited Segment Revenue(in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Segment Revenue U.S. Marketplace$210,441 $187,253 $608,321 $540,293 Digital Wholesale 7,043 27,339 32,001 79,441 Other 21,212 16,766 57,565 46,112 Total$238,696 $231,358 $697,887 $665,846 Unaudited Segment Income (Loss) from Operations(in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Segment Income (Loss) from Operations U.S. Marketplace$61,009 $50,410 $169,552 $126,670 Digital Wholesale (9,441) (25,317) (52,261) (173,815)Other 3,106 2,341 7,982 7,279 Total$54,674 $27,434 $125,273 $(39,866) Unaudited Condensed Consolidated Statements of Cash Flows(in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Operating Activities Net income (loss)$44,717 $22,511 $106,105 $(24,909)Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization 7,356 5,178 20,592 18,322 Currency gain on foreign denominated transactions 11 (741) (446) (234)Other non-cash income, net (101) — (101) (816)Deferred taxes 27,296 (3,180) 13,966 (47,344)Provision for doubtful accounts 924 736 2,047 1,534 Stock-based compensation expense 12,627 15,455 38,552 46,614 Amortization of deferred financing costs 129 129 387 387 Amortization of deferred contract costs 4,172 3,608 11,986 10,241 Impairments — 16,776 32,552 144,431 Changes in operating assets and liabilities Accounts receivable 1,181 (5,636) 3,404 (5,393)Inventory 711 863 338 149 Prepaid expenses, prepaid income taxes, and other assets (17,346) (332) (8,452) 7,093 Deferred contract costs (4,278) (3,859) (13,707) (11,307)Accounts payable (2,465) 1,469 4,227 10,770 Accrued expenses, accrued income taxes, and other liabilities (2,854) (1,706) (6,058) (2,568)Deferred revenue 247 79 1,933 555 Lease obligations (1,162) 4,846 4,838 32,232 Net cash provided by operating activities 71,165 56,196 212,163 179,757 Investing Activities Purchases of property and equipment (1,362) (10,288) (5,185) (64,937)Capitalization of website development costs (5,794) (4,607) (17,447) (15,314)Purchases of short-term investments — — — (494)Sale of short-term investments — — — 21,218 Advance payments to customers, net of collections — — — 259 Net cash used in investing activities (7,156) (14,895) (22,632) (59,268)Financing Activities Proceeds from issuance of common stock upon exercise of stock options 25 49 429 75 Payment of withholding taxes on net share settlements of restricted stock units (7,374) (5,986) (22,704) (17,391)Repurchases of common stock (110,279) (3,701) (294,887) (146,180)Payment of excise tax for repurchase of common stock — — (682) — Payment of finance lease obligations (20) (19) (60) (56)Change in gross advance payments received from third-party transaction processor (803) (624) (1,084) (704)Net cash used in financing activities (118,451) (10,281) (318,988) (164,256)Impact of foreign currency on cash, cash equivalents, and restricted cash (52) 1,356 2,083 582 Net (decrease) increase in cash, cash equivalents, and restricted cash (54,494) 32,376 (127,374) (43,185)Cash, cash equivalents, and restricted cash at beginning of period 233,349 218,365 306,229 293,926 Cash, cash equivalents, and restricted cash at end of period$178,855 $250,741 $178,855 $250,741 Unaudited Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income and GAAP Net Income (Loss) Per Share Attributable to Common Stockholders to Non-GAAP Net Income Per Share Attributable to Common Stockholders:(in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024(1) 2025 2024(1) GAAP net income (loss)$44,717 $22,511 $106,105 $(24,909)Amortization of intangible assets 813 509 1,830 3,148 Stock-based compensation expense 12,627 15,455 38,552 46,834 Transaction-related expenses 206 39 1,486 1,115 Restructuring expenses 3,803 — 3,803 — Impairments — 16,776 32,552 144,431 Income tax effects and adjustments (5,718) (9,058) (22,656) (47,284)Non-GAAP net income$56,448 $46,232 $161,672 $123,335 GAAP net income (loss) per share attributable to common stockholders Basic$0.46 $0.22 $1.06 $(0.24)Diluted$0.45 $0.21 $1.04 $(0.24)Non-GAAP net income per share attributable to common stockholders Basic$0.58 $0.45 $1.62 $1.18 Diluted$0.57 $0.44 $1.59 $1.18 Shares used in GAAP and Non-GAAP per share calculations Basic 98,170 103,322 100,034 104,770 Diluted 99,723 105,059 101,640 104,770 (1) During the three months ended March 31, 2025, we identified an immaterial error to our non-GAAP net income calculation related to the income tax effects and adjustments and have updated the table to correct the calculation for the three months ended September 30, 2024 and for the nine months ended September 30, 2024. For the three months ended September 30, 2024, this resulted in a decrease in the basic and diluted non-GAAP net income per share attributable to common stockholders from $0.46 per share to $0.45 per share and from $0.45 per share to $0.44, respectively. For the nine months ended September 30, 2024, this resulted in a decrease in the basic non-GAAP net income per share attributable to common stockholders from $1.19 per share to $1.18 per share. Unaudited Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA and GAAP Net Income (Loss) Margin to Non-GAAP Adjusted EBITDA Margin(in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 GAAP net income (loss)$44,717 $22,511 $106,105 $(24,909)Depreciation and amortization 7,356 5,178 20,592 18,322 Stock-based compensation expense 12,627 15,455 38,552 46,834 Transaction-related expenses 206 39 1,486 1,115 Restructuring expenses 3,803 — 3,803 — Impairments — 16,776 32,552 144,431 Other income, net (1,893) (2,623) (7,253) (9,185)Provision for (benefit from) income taxes 11,850 7,546 26,421 (5,772)Non-GAAP adjusted EBITDA$78,666 $64,882 $222,258 $170,836 GAAP net income (loss) margin 19% 10% 15% (4)%Non-GAAP adjusted EBITDA margin 33% 28% 32% 26% Unaudited Reconciliation of GAAP Marketplace (U.S. Marketplace Segment and Other) Operating Income to Non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA and GAAP Marketplace (U.S. Marketplace Segment and Other) Operating Income Margin to Non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA Margin(in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 GAAP Marketplace (U.S. Marketplace Segment and Other) Operating Income$64,115 $52,751 $177,534 $133,949 Depreciation and amortization 6,308 2,892 17,707 8,319 Stock-based compensation expense 12,026 14,476 36,866 43,899 Transaction-related expenses (2) 7 5 79 Non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA$82,447 $70,126 $232,112 $186,246 GAAP Marketplace (U.S. Marketplace Segment and Other) Operating Income margin 28% 26% 27% 23%Non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA margin 36% 34% 35% 32% Unaudited Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Profit Margin to Non-GAAP Gross Profit Margin(in thousands, except percentages) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenue$238,696 $231,358 $697,887 $665,846 Cost of revenue 25,164 48,807 80,266 125,890 GAAP gross profit 213,532 182,551 617,621 539,956 Amortization of intangible assets included in Cost of revenue — — — 875 Stock-based compensation expense included in Cost of revenue 75 96 213 387 Transaction-related expenses included in Cost of revenue 1 — 272 92 Restructuring expenses included in Cost of revenue 392 — 392 — Impairments included in Cost of revenue — 9,750 2,919 9,930 Non-GAAP gross profit$214,000 $192,397 $621,417 $551,240 GAAP gross profit margin 89% 79% 88% 81%Non-GAAP gross profit margin 90% 83% 89% 83% Unaudited Reconciliation of GAAP Expense to Non-GAAP Expense(in thousands) Three Months Ended September 30, 2025 GAAP expense Amortization ofintangible assets Stock-basedcompensationexpense Transaction-related expenses Restructuring expenses Impairments Non-GAAPexpense Cost of revenue$25,164 $— $(75) $(1) $(392) $— $24,696 Sales and marketing 89,368 — (2,781) — (1,424) — 85,163 Product, technology, and development 36,316 — (5,393) (12) (1,189) — 29,722 General and administrative 28,463 — (4,378) (193) (798) — 23,094 Impairments — — — — — — — Depreciation & amortization 4,711 (813) — — — — 3,898 Operating expenses(1)$158,858 $(813) $(12,552) $(205) $(3,411) $— $141,877 Total cost of revenue and operating expenses$184,022 $(813) $(12,627) $(206) $(3,803) $— $166,573 Three Months Ended September 30, 2024 GAAP expense Amortization ofintangible assets Stock-basedcompensationexpense Transaction-related expenses Restructuring expenses Impairments Non-GAAPexpense Cost of revenue$48,807 $— $(96) $— $— $(9,750) $38,961 Sales and marketing 81,216 — (3,017) (6) — — 78,193 Product, technology, and development 36,359 — (6,164) — — — 30,195 General and administrative 28,187 — (6,178) (33) — — 21,976 Impairments 7,026 — — — — (7,026) — Depreciation & amortization 2,329 (509) — — — — 1,820 Operating expenses(1)$155,117 $(509) $(15,359) $(39) $— $(7,026) $132,184 Total cost of revenue and operating expenses$203,924 $(509) $(15,455) $(39) $— $(16,776) $171,145 Nine Months Ended September 30, 2025 GAAP expense Amortization ofintangible assets Stock-basedcompensationexpense Transaction-related expenses Restructuring expenses Impairments Non-GAAPexpense Cost of revenue$80,266 $— $(213) $(272) $(392) $(2,919) $76,470 Sales and marketing 260,421 — (8,593) (497) (1,424) — 249,907 Product, technology, and development 106,936 — (16,500) (215) (1,189) — 89,032 General and administrative 82,305 — (13,246) (502) (798) — 67,759 Impairments 29,633 — — — — (29,633) — Depreciation & amortization 13,053 (1,830) — — — — 11,223 Operating expenses(1)$492,348 $(1,830) $(38,339) $(1,214) $(3,411) $(29,633) $417,921 Total cost of revenue and operating expenses$572,614 $(1,830) $(38,552) $(1,486) $(3,803) $(32,552) $494,391 Nine Months Ended September 30, 2024 GAAP expense Amortization ofintangible assets Stock-basedcompensationexpense Transaction-related expenses Restructuring expenses Impairments Non-GAAPexpense Cost of revenue$125,890 $(875) $(387) $(92) $— $(9,930) $114,606 Sales and marketing 245,801 — (9,141) (570) — — 236,090 Product, technology, and development 108,484 — (18,165) (63) — — 90,256 General and administrative 83,682 — (19,141) (390) — — 64,151 Impairments 134,501 — — — — (134,501) — Depreciation & amortization 7,354 (2,273) — — — — 5,081 Operating expenses(1)$579,822 $(2,273) $(46,447) $(1,023) $— $(134,501) $395,578 Total cost of revenue and operating expenses$705,712 $(3,148) $(46,834) $(1,115) $— $(144,431) $510,184 (1) Operating expenses include sales and marketing, product, technology, and development, general and administrative, impairments, and depreciation & amortization. Unaudited Reconciliation of GAAP Net Cash and Cash Equivalents Provided by Operating Activities to Non-GAAP Free Cash Flow(in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 GAAP net cash and cash equivalents provided by operating activities$71,165 $56,196 $212,163 $179,757 Purchases of property and equipment (1,362) (10,288) (5,185) (64,937)Capitalization of website development costs (5,794) (4,607) (17,447) (15,314)Non-GAAP free cash flow$64,009 $41,301 $189,531 $99,506 Non-GAAP Financial Measures and Other Business Metrics To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), we provide investors with certain non-GAAP financial measures and other business metrics, which we believe are helpful to our investors. We use these non-GAAP financial measures and other business metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures and other business metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making. The presentation of non-GAAP financial information and other business metrics is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. While our non-GAAP financial measures and other business metrics are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included above, and not to rely on any single financial measure to evaluate our business. While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis because we are unable to accurately predict without unreasonable effort the exact amount or timing of certain reconciling items between such GAAP and non-GAAP financial measures, including, as applicable, depreciation expenses, amortization of intangible assets, non-intangible amortization, stock-based compensation, transaction-related expenses, restructuring expenses, impairments, and income tax effects, we have provided a reconciliation of non-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release. We monitor operating measures of certain non-GAAP items including non-GAAP gross profit, non-GAAP gross margin, non-GAAP expense, non-GAAP net income, and non-GAAP net income per share attributable to common stockholders. These non-GAAP financial measures exclude the effect of amortization of intangible assets, stock-based compensation expense, transaction related-expenses, restructuring expenses, and impairments. Non-GAAP net income, non-GAAP net income attributable to common stockholders, and non-GAAP net income per share attributable to common stockholders also exclude certain income tax effects and adjustments. Our calculations of non-GAAP net income per share attributable to common stockholders utilize applicable GAAP share counts as included in the accompanying financial statement tables included in this press release. In addition, we evaluate our non-GAAP gross profit in relation to our revenue. We refer to this as non-GAAP gross profit margin and define it as non-GAAP gross profit divided by total revenue. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making. We define non-GAAP Adjusted EBITDA as net income (loss) adjusted to exclude: depreciation and amortization, stock-based compensation expense, transaction-related expenses, restructuring expenses, impairments, other income, net, and provision for (benefit from) income taxes. In addition, we evaluate our non-GAAP Adjusted EBITDA in relation to our revenue. We refer to this as non-GAAP Adjusted EBITDA margin and define it as non-GAAP Adjusted EBITDA divided by total revenue. We have presented non-GAAP Adjusted EBITDA and non-GAAP Adjusted EBITDA margin because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. We believe non-GAAP Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude. Accordingly, we believe that non-GAAP Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision making. We define non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA as GAAP Marketplace (U.S. Marketplace Segment and Other) operating income adjusted to exclude: depreciation and amortization, stock-based compensation expense, and transaction-related expenses. In addition, we evaluate our non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA in relation to our revenue. We refer to this as non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA margin and define it as non-GAAP Marketplace (U.S. Marketplace Segment and Other) Adjusted EBITDA divided by total revenue. We define Free Cash Flow as cash flow from operations adjusted to include: purchases of property and equipment and capitalization of website development costs. We have presented Free Cash Flow because it is a measure of our financial performance that represents the cash that we are able to generate after expenditures required to maintain or expand our asset base. We define a paying dealer as a dealer account with an active, paid marketplace subscription at the end of a defined period. The number of paying dealers we have is important to us and we believe it provides valuable information to investors because it is indicative of the value proposition of our marketplace products, as well as our sales and marketing success and opportunity, including our ability to retain paying dealers and develop new dealer relationships. We define Quarterly Average Revenue per Subscribing Dealer ("QARSD"), which is measured at the end of a fiscal quarter, as the marketplace revenue primarily from subscriptions to our Listings packages, Real-time Performance Marketing, our digital advertising suite, and other digital add-on products during that trailing quarter divided by the average number of paying dealers in that marketplace during the quarter. We calculate the average number of paying dealers for a period by adding the number of paying dealers at the end of such period and the end of the prior period and dividing by two. This information is important to us, and we believe it provides useful information to investors, because we believe that our ability to grow QARSD is an indicator of the value proposition of our products and the return on investment that our paying dealers realize from our products. In addition, increases in QARSD, which we believe reflect the value of exposure to our engaged audience in relation to subscription cost, are driven in part by our ability to grow the volume of connections to our users and the quality of those connections, which result in increased opportunity to upsell package levels and cross-sell additional products to our paying dealers.

CarGurus Announces Third Quarter 2025 Results

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