CarGurus (CARG) Q3 2025 earnings summary

Executive summary

• Achieved 14% year-over-year marketplace revenue growth in Q3 2025, with Adjusted EBITDA up 18% and net income nearly doubling to $44.7 million, driven by strong dealer additions, international expansion, and AI-powered product innovation.

• Launched new AI-driven products such as Price Vantage, Dealership Mode, and CG Discover, increasing engagement and conversion rates.

• Continued to grow the global paying dealer base, with U.S. and international dealer counts and QARSD rising year-over-year.

• Wound down CarOffer and related digital wholesale operations, with expected completion by year-end 2025 and total wind-down costs estimated at $13–15 million.

• Repurchased $111 million in shares in Q3 2025, with $295 million spent year-to-date and 23% of shares retired since December 2022.

Financial highlights

• Q3 2025 consolidated revenue was $238.7 million, up 3% year-over-year; marketplace revenue was $232 million, up 14% year-over-year.

• Gross profit for Q3 was $213.5 million, with a gross margin of 89%–90%; Adjusted EBITDA was $78.7 million, with a 33% margin.

• Non-GAAP diluted EPS was $0.57, up 30% year-over-year; GAAP net income was $44.7 million, net margin 19%.

• Ended Q3 with $178.8 million in cash and equivalents, no long-term debt, and strong operating cash flow.

• Digital Wholesale revenue declined sharply due to CarOffer wind-down, now 3% of total revenue.

Outlook and guidance

• Q4 2025 marketplace revenue guidance: $236–$241 million; full-year 2025: $902–$907 million.

• Q4 2025 Adjusted EBITDA guidance: $83–$91 million; full-year 2025: $313–$321 million.

• Q4 2025 non-GAAP EPS expected $0.61–$0.67; full-year 2025: $2.19–$2.25.

• Guidance excludes major macroeconomic disruptions and future FX impacts.

• Management expects sufficient liquidity for at least the next 12 months.