CARG · CarGurus, Inc.

CarGurus reported Q1 2026 revenue of $243.6 million, up 15% year-over-year, at the midpoint of its guidance range. The growth was driven by a 7% increase in total paying dealers to 34,596 and an 8% rise in consolidated quarterly average revenue per paying dealer (QARSD) to $6,647. International paying dealers grew 17% to 8,480, while U.S. paying dealers increased 4% to 26,116. Gross profit rose 14% to $224.6 million, but gross margin contracted 102 basis points to 92%, partly due to $0.5 million in impairment charges recorded in cost of revenue. Operating expenses surged 25% to $184.5 million, including $19.2 million in impairments, leading to a 23% decline in GAAP net income from continuing operations to $32.2 million (13% margin, down 659 bps). However, non-GAAP Adjusted EBITDA from continuing operations grew 17% to $80.2 million, exceeding the high end of guidance, with margin expanding 56 bps to 33%. Management highlighted AI-led product innovation as a key driver. The company repurchased $175 million in shares during the quarter, reducing diluted share count. For Q2 2026, CarGurus guided revenue of $247-$252 million, non-GAAP Adjusted EBITDA of $77.5-$85.5 million, and non-GAAP EPS of $0.57-$0.64. Full-year 2026 guidance calls for revenue growth of 10%-13% and a non-GAAP Adjusted EBITDA margin decline of 1.5-2.5 percentage points, reflecting continued investment. The strong EBITDA performance and aggressive buyback signal confidence, though GAAP profitability was impacted by impairment charges.