CarGurus (NASDAQ:CARG) executives highlighted what they called a “pivotal year” in 2025, pointing to mid-teens revenue growth, expanding profitability, and increased product innovation during the company’s fourth-quarter and full-year 2025 earnings call. Management also detailed the completed wind down of CarOffer, new investments planned for 2026, and an expanded share repurchase authorization.
2025 results: revenue up 14%, profitability expanded
For continuing operations, CarGurus reported fourth-quarter revenue of $241 million, up 15% year-over-year and at the high end of its guidance range. Management said the quarter benefited from strength in subscription-based listings revenue, “overperformance” in advertising, and continued momentum internationally.
On profitability, the company said fourth-quarter and full-year non-GAAP gross profit was $223 million and $842 million, respectively, both up 14% year-over-year. Non-GAAP gross margin was 92% in the fourth quarter (down roughly 90 basis points year-over-year) and 93% for the full year (up about 40 basis points).
Non-GAAP adjusted EBITDA in the fourth quarter was $88 million, up 13% year-over-year, with an adjusted EBITDA margin of 37% (about 60 basis points lower year-over-year). For the full year, adjusted EBITDA was $319 million, up 25%, and adjusted EBITDA margin increased roughly 310 basis points to 35%.
GAAP net income per diluted share attributable to common stockholders was $0.56 in the fourth quarter and $1.96 for the full year, up 24% and 62%, respectively. Non-GAAP net income per diluted share was $0.63 for the quarter and $2.28 for the year, up 17% and 31%.
Dealer and marketplace metrics: QARSD up, retention improved
CEO Jason Trevisan said 2025 performance included wallet share expansion, retention reaching its highest level in three years, accelerated new dealer additions, and traffic growth translating into higher lead volume. In the fourth quarter, U.S. QARSD grew 8% year-over-year, and the company added 1,357 paying U.S. dealers year-over-year.
For the full year, Trevisan also cited consolidated QARSD growth of 8% year-over-year and global paying dealer count growth of 2,399, alongside nearly 25% year-over-year growth in add-on product adoption.
On retention, President and COO Sam Zales attributed improved dealer satisfaction to “clear” ROI and lead growth in both quantity and quality, as well as greater support from the company’s account management function. Zales said CarGurus added a “dealer performance partner” group—industry professionals who share best practices with dealers—which has improved lead management practices and contributed to higher close rates. He also pointed to new software and data tools, including Price Vantage and Dealer Data Insights, as further embedding CarGurus into day-to-day dealership operations.
Trevisan added that the company does not break out revenue outlook by QARSD versus rooftops, noting that faster rooftop growth can dampen QARSD comparisons, and said the business is optimized and communicated primarily through monthly recurring revenue and revenue.
Product and AI initiatives: Price Vantage, CG Discover, Dealership Mode
Management repeatedly emphasized faster “AI-driven innovation” in 2025, saying the company launched more new products than in any prior year and is using AI to increase product velocity. Trevisan said CarGurus ingested about 500 million first-party shopper signals per day on average in 2025 and used AI to translate those into real-time demand, pricing, and inventory insights.
Key dealer-facing launches included Price Vantage (introduced in October) and New Car Exposure. Trevisan said Dealer Data Insights became central to dealer workflows, with 60% of global paying dealers using the insights. For Price Vantage, he said early results showed accelerating inventory turnover and increasing vehicle detail page views, with nearly 80% of adopting dealers active weekly. Compared with prior usage of the company’s free pricing tool, Price Vantage users executed 66% more price changes and logged more sessions per day.
When asked about pricing, Trevisan said CarGurus has not disclosed a specific price point and is testing different price levels. He said Price Vantage is sold à la carte and requires a dealer to be a marketplace customer.
On the consumer side, CarGurus discussed generative AI search product CG Discover and Dealership Mode. Trevisan said Discover traffic grew 3.5x and leads grew 10x quarter-over-quarter, with average session time up nearly 20% and Discover users spending 4.4x more time than regular visitors. Zales said consumer investments, particularly around AI, as well as a broader reach through brand campaigns, have supported traffic growth and increased direct visits and app usage.
Digital Deal and online transaction tools expanded
CarGurus said it scaled Digital Deal to 13,500 dealers globally, adding nearly 3,800 year-over-year. The company also said Digital Deal leads with “high-value actions” increased 78% year-over-year in 2025 and represented about 70% of Digital Deal leads, while financing-related leads grew 86%. Management said Digital Deal leads can convert up to 4.7x higher than standard marketplace leads, with greater lift for shoppers located farther from the dealership.
CarOffer wind down, capital return, and 2026 outlook
Trevisan said the company completed the CarOffer wind down in the fourth quarter of 2025 and will present CarOffer financial results as discontinued operations. Beginning in the fourth quarter of 2025, CarGurus also reports as a single segment following the wind down.
CarGurus said it incurred and paid $13.3 million in total wind down expenditures, including $5.4 million in one-time cash restructuring charges attributable to discontinued operations, which management said was at the low end of its prior estimate.
The company ended the year with $191 million in cash and cash equivalents, up $12 million from the end of the third quarter, driven primarily by higher adjusted EBITDA and partially offset by $57 million in fourth-quarter share repurchases. In 2025, it repurchased about $350 million in shares and said that since the fourth quarter of 2022, it has repurchased about $721 million, or roughly 25% of outstanding shares. The board authorized a new $250 million share repurchase program available through December 31, 2026.
For the first quarter of 2026, CarGurus guided revenue of $240.5 million to $245.5 million (up 13% to 16% year-over-year) and non-GAAP adjusted EBITDA of $72 million to $80 million (up 5% to 16%). The company guided first-quarter non-GAAP EPS of $0.52 to $0.58 and diluted weighted average shares outstanding of about 94 million, noting that guidance includes roughly $1 million in ongoing quarterly CarOffer expenses post-wind down.
For the full year 2026, CarGurus expects revenue growth of 10% to 13% year-over-year and said non-GAAP adjusted EBITDA margins are expected to compress by about 1.5 to 2.5 percentage points versus 2025, reflecting increased investment in product and technology as the company plans an “accelerated pace” of AI product introductions. Trevisan said investment priorities for 2026 are led by product and technology development, followed by international and account management.
About CarGurus (NASDAQ:CARG)
CarGurus, Inc operates an online automotive marketplace designed to connect buyers and sellers of new and used vehicles. Through its proprietary search engine and data-driven pricing tools, the platform enables consumers to compare listings, assess fair market values and locate local dealers offering competitive deals. CarGurus also provides detailed vehicle history reports, dealer reviews and financing options to streamline the car-shopping process for both private parties and franchised dealerships.
The company’s core product offerings include Instant Market Value (IMV), which leverages pricing algorithms to help buyers identify over- or under-priced vehicles, as well as dealer subscription services that grant automotive retailers access to lead generation tools, targeted advertising and dynamic pricing insights.
