CarGurus NASDAQ: CARG reported second-quarter 2026 revenue of $251 million, up 13% from a year earlier and above the midpoint of its guidance range, as adoption of add-on dealer products and international growth supported results. Adjusted EBITDA rose 7% to $85 million, representing a 34% margin, while free cash flow totaled $88 million.
Chief Executive Officer Jason Trevisan said the company’s international business grew 28% year over year during the quarter. U.S. CarSid revenue increased 8%, and the company added 673 paying U.S. dealers from a year earlier. CarGurus said add-on product adoption was its largest contributor to year-over-year and sequential growth in quarterly average revenue per subscribing dealer.
Second-quarter non-GAAP net income per diluted share was $0.66, up 16% year over year. The company ended the period with $122 million in cash and cash equivalents, up $50 million from the prior quarter as cash generation more than offset $29 million in share repurchases.
Dealer Spending Remained Deliberate
Trevisan said dealer customers have been cautious about incremental spending during the first half of 2026. He attributed that caution to pressure on dealer margins and gross profit per unit, fewer days vehicles are sitting on dealer lots, and recent Federal Trade Commission-mandated all-in pricing transparency requirements.
“We view these factors as temporary, not structural,” Trevisan said.
He said dealer unit sales and vehicle prices generally increased during the first half, while days on lot declined. Lower-priced inventory sold particularly well, reducing dealers’ immediate reliance on marketing, he said. However, Trevisan added that some of these conditions improved during the first half.
Despite the more measured spending environment, average sessions per dealer on CarGurus’ platform increased 28% year over year. Trevisan said higher engagement reflected broader use of the company’s artificial intelligence-enabled tools and their expansion across dealer workflows.
AI Products Drive Dealer Engagement
CarGurus highlighted growth in its newer dealer software and data offerings, which the company groups into inventory, marketing, lead conversion, and data products. Trevisan said the company collects nearly half a billion first-party signals each day across shopper demand, pricing, inventory, and behavior, and is using that data to develop dealer tools and consumer experiences.
Among subscribing independent dealers, those in the top quintile of platform engagement generated 78% more leads per unit than those in the bottom quintile, according to the company.
- PriceVantage: Bookings grew more than 50% sequentially in the second quarter. CarGurus said dealers adopting the inventory-pricing tool saw a median 15% increase in vehicle detail page views and a 9% increase in leads per listing.
- VinMax: The AI-powered marketing product identifies underperforming vehicle listings and promotes them through organic sort, highlights, and audience targeting. Listings promoted through the early-access rollout sold 23% faster and generated 34% more daily leads than comparable non-promoted listings, the company said.
- Shopper Signals: CarGurus introduced a competition filter intended to show dealers how many other dealers a shopper contacted, helping sales teams assess urgency and prioritize outreach.
- Competitive data tools: The company said its weekly competitive digest email has generated an open rate above 80%.
President and Chief Operating Officer Sam Zales said PriceVantage adoption has been broad-based across independent and franchise dealers, rather than concentrated among a particular pricing tier. He described the product as a predictive analytics tool that helps dealers assess wholesale versus retail pricing and local vehicle demand.
During the question-and-answer session, Trevisan said the company continues to evaluate acquisitions, with likely opportunities centered on smaller dealer-focused technology and software solutions that could accelerate its expansion across the four product pillars.
Consumer AI Experience Expands
In July, CarGurus launched Guru as the consumer-facing brand for its AI capabilities. Guru includes the company’s AI-native experience, previously called Discover, as well as an AI overlay integrated into its existing website.
The company said Guru-driven leads in the U.S. increased 60% sequentially. Trevisan said the AI tools are designed not as a separately monetized search product but as part of CarGurus’ core search experience, helping consumers find vehicles and providing dealers with more information about shopper preferences and intent.
CarGurus has also introduced its conversational AI experience in the U.K. and Canada. The capability allows shoppers to describe their needs and intended uses rather than relying solely on conventional vehicle filters.
Elsewhere in the consumer experience, the company said improvements to Sell My Car increased funnel conversion and produced significant incremental leads. Engagement with Dealership Mode, which provides pricing transparency, deal ratings, payment estimates, and vehicle comparisons on participating U.S. dealer lots, more than doubled in the company’s app during the second quarter.
Guidance and Capital Allocation
CarGurus reiterated its expectation for full-year 2026 revenue growth of 10% to 13% year over year. For the third quarter, the company forecast revenue of $253.5 million to $258.5 million, representing year-over-year growth of 9% to 12%.
The company expects third-quarter adjusted EBITDA of $82 million to $90 million and non-GAAP earnings per share of $0.63 to $0.69, based on approximately 90 million diluted weighted-average shares outstanding.
CarGurus raised its full-year profitability outlook. It now expects non-GAAP adjusted EBITDA margin to decline by approximately 50 to 150 basis points in 2026 relative to 2025, an improvement from its prior outlook. Trevisan said AI-driven productivity gains, including in product development, customer support, software usage, and go-to-market operations, have improved efficiency while allowing the company to maintain its pace of product introductions.
The company repurchased $29 million of shares in the second quarter, bringing year-to-date buybacks to $204 million under its $250 million 2026 authorization. As of the end of the quarter, $46 million remained available for repurchases. Since 2022, CarGurus has repurchased approximately $925 million of stock, representing more than 30% of shares outstanding, according to 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.
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