CarGurus NASDAQ: CARG reported first-quarter 2026 results that management described as “strong,” driven by premium tier adoption, increased use of AI-powered products, lead growth, and net dealer additions. On the company’s earnings call, Chief Executive Officer Jason Trevisan said revenue rose 15% year-over-year to $244 million, while adjusted EBITDA increased 17% to $80 million, resulting in a 33% adjusted EBITDA margin.
Trevisan highlighted particular strength in the company’s international operations, where revenue grew 39% year-over-year in the U.K. and Canada, which he said reinforced CarGurus’ ROI advantage and contributed to share gains. He also framed the quarter as progress against three strategic “value creation drivers”: deeper integration into dealer workflows, an AI-led consumer shopping journey, and disciplined capital deployment.
Dealer workflow expansion: inventory, conversion, and data products
Trevisan said CarGurus is broadening its dealer value proposition beyond marketing into inventory, lead conversion, and data, aiming to connect those pillars with “mutually reinforcing products.” He noted dealers rank CarGurus as “number 1 in ROI among listing sites,” citing a recent survey of a select group of dealers.
In the inventory pillar, the company is expanding PriceVantage, which Trevisan described as its first specialized software solution sold a la carte. Since its October launch, PriceVantage has reached “several hundred paying dealers,” according to Trevisan. He said the product uses first-party demand signals, market data, and machine learning to generate VIN-level pricing recommendations aligned to dealer objectives. Trevisan also shared outcome metrics for highly engaged users, saying those dealers saw a 117% improvement in turn time relative to their top five competitors on CarGurus and a 47% median increase in daily vehicle detail page (VDP) views as they adjusted pricing more quickly and precisely.
Sam Zales, President and Chief Operating Officer, said PriceVantage is designed as a “profit maximization predictive tool,” contrasting it with other market offerings he characterized as more focused on risk mitigation using historical book prices. Zales said CarGurus is selling PriceVantage to both independent and franchise dealers, and he added that adoption includes cases where dealers are new to pricing tools as well as situations where PriceVantage complements an existing solution.
CarGurus also emphasized distribution of its pricing intelligence through a browser extension that surfaces pricing signals inside inventory management systems and auction sites. Trevisan said usage of the extension tripled quarter-over-quarter, which he positioned as evidence that more daily inventory decisions are occurring “with CarGurus data in the loop.”
In lead conversion, Trevisan discussed an April launch of Shopper Signals within premium tiers. The feature aggregates first-party shopper behavior—such as browsing activity, preferences, dealer engagement, and Digital Deal actions—and uses AI to provide dealers with more context around shopper intent. Trevisan said more than 8,000 dealers engaged with the feature since its mid-April launch.
In the data pillar, Trevisan said CarGurus launched Performance Insights, a monthly report that benchmarks a dealer’s marketplace performance and pairs benchmarks with VIN-level recommendations. He reported a 76% open rate for the report and said dealers receiving Performance Insights made an average of 59% more price updates than the prior period.
Trevisan said dealer engagement and products per dealer increased, and that U.S. CarSID grew 9% year-over-year. He also said CarGurus added 963 paying U.S. dealers year-over-year.
AI-led consumer journey: research, consideration, and purchase
Trevisan described AI as reshaping vehicle discovery and research and said CarGurus is using its marketplace data to engage shoppers earlier and more deeply through the purchase funnel. He said monthly uniques, sessions, time spent, and “steps taken on the platform” grew year-over-year, and he called the app the company’s fastest-growing traffic source. Trevisan added that CarGurus is “number one in the auto category in active users and time spent,” according to his remarks.
In the research stage, Trevisan said CarGurus launched an app inside ChatGPT, calling it the first U.S. automotive marketplace to integrate live local inventory directly into the platform. He said AI-driven search traffic remains small but is growing quickly and is converting at meaningfully higher rates than traditional channels. He also discussed continued development of the company’s on-site generative AI search experience, Discover, including adding new car inventory, improving relevance using shopper profile data, and streamlining the path from conversation to contacting dealers. Trevisan said Discover users grew quarter-over-quarter and that leads grew 52% quarter-over-quarter.
In the consideration stage, Trevisan said the company introduced a conversational AI flow to simplify valuations and offers in Sell My Car. He added that Sell My Car launched in Canada during the first quarter and that early engagement and adoption were “off to a strong start.”
In purchase, Trevisan highlighted Dealership Mode, which surfaces pricing, deal ratings, payment estimates, and AI-powered comparisons when a CarGurus app user arrives at a participating dealer. He said the company has begun rolling out capabilities that provide dealers more visibility into “verified online activity,” which he said is more predictive of purchase intent than a traditional lead. Trevisan reported that daily lot visits have grown 67% since Q4 and said Dealership Mode has become a driver of app downloads.
Investment posture and AI-enabled productivity
Trevisan described 2026 as “an investment year by design,” with increased product, technology, and development spend—including AI-driven innovation—as well as higher sales and marketing investment to support new dealer product adoption and consumer brand growth. He said these investments are expected to “modestly weigh on margins in the near term,” and the company reiterated its expectation that full-year adjusted EBITDA margins will compress by approximately 1.5 to 2.5 percentage points versus 2025.
Trevisan also outlined internal AI adoption, saying a majority of employees use AI in their daily workflow. He said the company standardized AI systems across engineering and product in Q1 and established a dedicated AI solutions team to target high-value workflows with measurable ROI. Trevisan said AI solutions contributed to a 20% year-over-year productivity lift and a 50% lift quarter-over-quarter among “AI laggards.” He added that AI-powered content creation helped drive roughly a 30% year-over-year increase in unpaid leads and that AI has helped the sales team spend more time with customers and reach more dealers.
During Q&A, Trevisan clarified that a reference to moving from AI-assisted workflows toward “agentic AI capabilities” was primarily about internal evolution, but he added that the same evolution “is happening with our products already.” Asked for examples, Trevisan pointed to pricing and inventory recommendations that read the market in real time and predict outcomes of changes, while indicating the company would provide more detail as agentic use cases become more pronounced for customers.
Financial results, guidance, and capital returns
Trevisan said first-quarter revenue exceeded the midpoint of guidance, supported by strong year-end 2025 bookings and international momentum, with “slight moderation” in OEM advertising reflecting a typical first-quarter step down. On profitability, he reported non-GAAP gross profit of $225 million, up 14% year-over-year, and a non-GAAP gross margin of 92%, down about 80 basis points. Non-GAAP operating expenses totaled $152 million, up 13% year-over-year, reflecting higher sales and marketing and higher product, technology, and development spending.
Adjusted EBITDA came in above the high end of guidance at $80 million, and Trevisan said adjusted EBITDA margin improvement was “due in part to a favorable item related to a retroactive change in Canadian tax law.” In response to an analyst question about margin outperformance, Trevisan said the tax-law change was a key item and added there were “a couple other timing items” and smaller one-time items that, in aggregate, would have put results closer to the midpoint. He said there were “no structural changes or surprises,” and reiterated that “midpoint is where we aim.”
CarGurus reported first-quarter non-GAAP net income per diluted share attributable to common stockholders of $0.58, up 21% year-over-year. The company ended the quarter with $72 million in cash and cash equivalents, down $118 million from the end of Q4, which Trevisan attributed primarily to $175 million of share repurchases partially offset by adjusted EBITDA. As of the end of Q1, the company had $75 million remaining under its 2026 authorization.
For the second quarter, CarGurus guided revenue to $247 million to $252 million, representing 11% to 14% year-over-year growth. The company guided non-GAAP adjusted EBITDA to $77.5 million to $85.5 million and non-GAAP EPS to $0.57 to $0.64, with diluted weighted average shares outstanding of approximately 91 million. For the full year, CarGurus reiterated its expectation of 10% to 13% revenue growth and the previously stated margin compression outlook.
On capital allocation, Trevisan said the company has repurchased approximately $896 million of shares since 2022, representing about 29% of shares outstanding. He said the board authorized a new $250 million share repurchase program through year-end 2026, and the company deployed about $175 million in Q1. Asked about cash levels following repurchases, Trevisan said the company considers minimum cash in the context of cash on hand and ready access to liquidity, including an easily accessible line of credit, and noted that working-capital timing can drive cash swings.
In international markets, Zales was asked about reports of potential churn at a large U.K. competitor. He said CarGurus’ success in the U.K. and Canada is following its U.S. playbook and emphasized ROI positioning, adding that while there was “probably a positive impact,” it did not have “a massive effect” on CarGurus’ business.
Closing the call, Trevisan reiterated the company’s focus on expanding dealer reliance through workflow products, increasing consumer engagement across the shopping journey, and maintaining disciplined capital allocation while funding AI-driven innovation and returning capital to stockholders.
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.
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